The world’s largest tech company stormed small rivals at a record pace this year as US politicians and regulators prepare to crack down on transactions “under radar.”
Since early 2021, tech companies have spent at least $ 264 billion to acquire potential rivals under $ 1 billion, according to Refinitiv data analyzed by the Financial Times. This is twice the previous record of the dot-com boom registered in 2000.
The over-acquisition comes from lawmakers accusing White House, regulators, and large tech companies, especially Apple, Facebook, Google, Amazon, and Microsoft, of curbing competition and harming consumers. It happens in much more strict surveillance.
The Federal Trade Commission is already investigating Facebook’s acquisition of Instagram and WhatsApp and warns that it may scrutinize even after other transactions have been completed. If a transaction is deemed illegal, it has the power to rewind the transaction and block other transactions in the future.
Last week, the Commission released its findings on technology M & A activities from 2010 to 2019, highlighting the decade-long enthusiastic activity of companies rapidly acquiring smaller rivals.
Lina KhanThe FTC chair said the study “emphasizes the need to scrutinize reporting requirements.” .. .. And identify areas where the FTC may have unfairly created loopholes that allow transactions to fly under radar. “
Transactions under $ 92 million do not need to be reported to US regulatory agencies.
FT data analysis shows that despite such warnings, trading has been accelerating since the end of the reporting time frame. Since the beginning of the year, tech companies have signed record 9,222 transactions to buy startups worth less than $ 1 billion, about 40 percent above 2000 levels.
Barrylin, director of the Washington-based Open Markets Institute, said:
“This deal is bad because it makes these companies much stronger. It’s the kind of competition that can empower and innovate the people, capital markets and investors who work for them. I will stop you. “
With millions of people embracing the Internet and e-commerce during the pandemic, companies have stepped up their digital capabilities, bringing technology mergers and acquisitions of all sizes to new heights in 2021. bottom.
According to an FTC survey, between January 2010 and December 2019, Apple, Facebook, Amazon, Google and Microsoft made 819 acquisitions that were not registered due to non-reporting requirements. It became clear. Apart from the size of the transaction, other exemptions may include cross-border transactions for which the buyer has no control.
The study highlights how big tech companies can systematically take advantage of start-up acquisitions to eliminate future competitors, Kahn said.
“”[The study] We understand the extent to which these companies have spent significant resources on acquisitions of start-ups, patent portfolios, and entire teams of engineers, and how most of them have been achieved outside of our scope. “Khan said.
Transactions below the report’s threshold of $ 92 million also hit a record high this year, with $ 66 billion spent taking over assets in this size category through 8,451 transactions, according to Refinitiv data. , Increased by 35% year-on-year.
Microsoft, a software-to-cloud computing group, was the largest acquirer of small assets with nine transactions below the FTC threshold among the five companies in the report.The company founded by Bill Gates also made several larger deals, including: Take over the pioneer of voice technology $ 16 billion nuances.
The second acquisition in the small transaction category was e-commerce giant Amazon, which had eight transactions.Jeff Bezos’ company also made one big deal with the acquisition of a legendary movie studio. MGM is $ 8.45 billion..
The FTC report reports a U.S. antitrust led by the Biden administration and regulators who have gained new firepower under Khan, who is now one of the most influential figures at the forefront of the fair competition in Washington. We are in the midst of a battle to transform trust law.
The survey results are as follows. Drastic order Joe Biden signed in July with the goal of curbing the upset of large corporations by eliminating anti-competitive practices. This order, which spans sectors from technology and transportation to healthcare and banking, is part of the Biden administration’s broader strategy to address the concentration of corporate power in several industries.
According to an FTC report, Apple, Facebook, Amazon, Google and Microsoft have made 616 acquisitions worth more than $ 1 million, more than 75% of which are non-competitive to the founders and key employees of the target companies. The clause was included. At least 40% of asset age transactions involved companies under the age of five.
FTC Commissioner Rebecca Kelly Slaughter said: To the monopoly giant. ”
Apple, Facebook, Amazon, Google and Microsoft declined to comment.
Additional reports by Richard Waters, Dave Lee, Hannah Leigh and Patrick Magee
Leading tech company raids small rivals at record pace
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