FTC demanding info from Apple & other big tech companies about past acquisitions

Posted:
in General Discussion edited August 2020
The Federal Trade Commission announced that it is launching a probe into past acquisitions made by Apple, Microsoft, Alphabet, Amazon, Google, and Facebook, going back to 2010.




The FTC is moving forward with antitrust investigations against some of the largest tech companies in the U.S.

The agency is hoping to uncover information that was not reported to the antitrust agencies under the Hart-Scott-Rodino (HSR) Act. All involved companies will bet required to provide information and documents on the terms, scope, structure, and purpose of transactions that took place between January 1, 2010, and December 31, 2019.

It isn't yet clear if any or all of Apple's acquisitions need to be re-examined.

The investigation is intended to help the FTC understand large technology firms' acquisition activity and gain insight into how the firms handle reporting transactions to antitrust agencies. They also are investigating whether or not the large companies are engaging in anti-competitive practices by buying out nascent or potential competitors.

"Digital technology companies are a big part of the economy and our daily lives," said FTC Chairman Joe Simons. "This initiative will enable the Commission to take a closer look at acquisitions in this important sector, and also to evaluate whether the federal agencies are getting adequate notice of transactions that might harm competition. This will help us continue to keep tech markets open and competitive. for the benefit of consumers."

Chairman Simons has said that he'd be open to the idea of breaking apart giant tech firms like Apple by undoing mergers, if it is determined large entities like Facebook are harming competition across the tech industry as a whole by being too dominant.

Apple has been under fire for anti-competitive practices in the past. Spotify has claimed that Apple gives Apple Music preferential treatment with Siri and Home Pod integration. They also allege that Apple's 30 percent cut of purchases on the app store -- such as a Spotify subscription -- make it hard for the company to turn a profit.

Tile met with the House Judiciary Committee's antitrust subcommittee in January to raise concerns about big tech's ability to push smaller companies out of the market. The story parallels that of LunaDisplay and Duet Display, who claimed that Apple had "Sherlocked" them in order to develop its Sidecar feature.
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Comments

  • Reply 1 of 22
    Hmmmm .... sounds like a fishing expedition
    StrangeDayscornchipwatto_cobra
  • Reply 2 of 22
    rob53rob53 Posts: 2,647member
    Of course, when was the last time you heard anything about the FTC investigating pharmaceutical, oil/gas, and medical insurance companies?Technology companies pay a lot for lobbying but the other companies much pay more to bribe the FTC to stay away from them.
    mwhiteStrangeDaysmac_dogminicoffeelarryawatto_cobra
  • Reply 3 of 22
    gatorguygatorguy Posts: 23,176member
    As I'm reading it the FTC is not interested in rehashing previous acquisitions that were vetted and approved by regulatory agencies. I think the inquiry involves those smaller company purchases that haven't previously required review and tend to fly under the radar. The FTC absolutely wants a report on every one of those, and detailed as tho it was a purchase that would have fallen under the Hart–Scott–Rodino Antitrust Improvements (HSR) ActThey also want to understand what happens to those companies after the purchase. 

    At the moment they don't want to look at something like Beats which already passed muster, but stuff like Xnor and InVisage and any of the other 50+ company purchases a tech like Apple makes each year but rarely acknowledges. The concerns have to do with how those buyouts and acqui-hires are impacting the marketplace and limiting the ability of smaller and/or and startup companies to compete with the big boys.

    It should be a pretty revealing report when it's all put together and released, and it will get publically released IMHO.

    EDIT: My guess is this is the result of an earlier hearing:
    https://www.ftc.gov/news-events/events-calendar/2018/10/ftc-hearing-3-competition-consumer-protection-21st-century
    edited February 2020 FileMakerFellermuthuk_vanalingam
  • Reply 4 of 22
    gatorguygatorguy Posts: 23,176member
    rob53 said:
    Of course, when was the last time you heard anything about the FTC investigating pharmaceutical, oil/gas, and medical insurance companies?Technology companies pay a lot for lobbying but the other companies much pay more to bribe the FTC to stay away from them.
    Absolutely not IMO. I think between Apple and Google and Microsoft alone their propensity to snap up companies investing in new tech research before they mature helps  those big three maintain their dominance over the technology sector, and in doing so may well be acting against fair competition, aka antitrust laws.
    muthuk_vanalingam
  • Reply 5 of 22
    mike1mike1 Posts: 2,754member
    gatorguy said:
    At the moment they don't want to look at something like Beats which already passed muster, but stuff like Xnor and InVisage and any of the other 50+ company purchases a tech like Apple makes each year but rarely acknowledges. The concerns have to do with how those buyouts and acqui-hires are impacting the marketplace and limiting the ability of smaller and/or and startup companies to compete with the big boys.
    I wonder how many of those companies were started and existed just to get to the point where they could be bought up by the "big boys". Ka-ching!

    cornchipmwhitecy_starkmanStrangeDayskurai_kagewatto_cobra
  • Reply 6 of 22
    mike1 said:
    I wonder how many of those companies were started and existed just to get to the point where they could be bought up by the "big boys". Ka-ching!

    They would have had to have some products/ideas of value first.
    muthuk_vanalingam
  • Reply 7 of 22
    cornchipcornchip Posts: 1,857member
    mknelson said:
    mike1 said:
    I wonder how many of those companies were started and existed just to get to the point where they could be bought up by the "big boys". Ka-ching!

    They would have had to have some products/ideas of value first.

    🤨 yeah? 🤨
    watto_cobra
  • Reply 8 of 22
    It’s a little late there buddy... (reviewing old acquisitions)

    Apple isn’t really in the same category as Facebook and Google with regards to acquisitions.  

    The only significant acquisition by Apple was Beats (in 2014) for 3 billion.  The accessory business  (both Apple’s and competitors) are still going strong.  They might want to break up Apple, but not for antitrust reasons (in this area).

    The main area Apple could be considered abusing their position is in the App Store.  That’s more an area Apple should make concessions, rather than it be a separate entity.  
  • Reply 9 of 22
    gatorguygatorguy Posts: 23,176member
    It’s a little late there buddy... (reviewing old acquisitions)

    Apple isn’t really in the same category as Facebook and Google with regards to acquisitions.  

    The only significant acquisition by Apple was Beats (in 2014) for 3 billion.  The accessory business  (both Apple’s and competitors) are still going strong.  They might want to break up Apple, but not for antitrust reasons (in this area).

    The main area Apple could be considered abusing their position is in the App Store.  That’s more an area Apple should make concessions, rather than it be a separate entity.  
    Apple makes about 30 acquisitions per 6 months on average according to Tim Cook. It's those purchases the FTC is wanting more information about, not the big vetted ones like Beats. So while they may be late it's not for the reason you gave. IMO they should have been asking about these small company buy ups a couple years ago at least. 
    edited February 2020 muthuk_vanalingam
  • Reply 10 of 22
    spice-boyspice-boy Posts: 1,439member
    Hmmmm .... sounds like a fishing expedition
    The same way an audit is, that's how you find cheaters. 
    muthuk_vanalingambeowulfschmidt
  • Reply 11 of 22
    mknelson said:
    mike1 said:
    I wonder how many of those companies were started and existed just to get to the point where they could be bought up by the "big boys". Ka-ching!

    They would have had to have some products/ideas of value first.
    If their ideas weren’t valuable they wouldn’t have been purchased. 

    The question is whether a startup that wants to be sold to a bigger fish means the act is “anti-competitive”. Not convinced. 
    watto_cobra
  • Reply 12 of 22
    rob53 said:
    Of course, when was the last time you heard anything about the FTC investigating pharmaceutical, oil/gas, and medical insurance companies?Technology companies pay a lot for lobbying but the other companies much pay more to bribe the FTC to stay away from them.
    Ding, ding, ding...

    you win the prize for hitting the nail on the head. 
    Pharma/medical insurance companies are calling in favors to their golf buddies, rather than giving a shit (innovation that helps mankind and the planet). They’d rather just sit around, collect their profits, hoping the rules that help line their pockets, never change. 
    watto_cobra
  • Reply 13 of 22
    You can pretty much draw a straight line between Apple's acquisitions to business direction and specific features.

    However for some of the other brands (particularly Google) this would be more complicated. Google was acquisition hungry for years and it didn't make a lot of sense, it might lead to the view that they were just buying competitors or shaking down smaller companies for their IP. (To some extent that might be the case, e.g. Motorola and Fitbit.)
  • Reply 14 of 22
    gatorguygatorguy Posts: 23,176member
    mknelson said:
    mike1 said:
    I wonder how many of those companies were started and existed just to get to the point where they could be bought up by the "big boys". Ka-ching!

    They would have had to have some products/ideas of value first.
    If their ideas weren’t valuable they wouldn’t have been purchased. 

    The question is whether a startup that wants to be sold to a bigger fish means the act is “anti-competitive”. Not convinced. 
    The FTC isn't convinced either... yet. That's one of the points this inquiry is meant to examine.

    EDIT: The Information made this observation:

    "One scenario that is likely of most concern to the agency is when big companies shut down smaller ones that they have purchased simply to snuff out a potential competitor. That’s in contrast to startups acquired simply for their talent—what are called “acqui-hires”—or those that flourish into much bigger phenomena (think YouTube, Instagram and WhatsApp). 

    Facebook, for example, has shuttered a number of apps that it acquired, though no company in its right mind would ever admit to doing so to kill competition. In one of those cases, Facebook acquired a  polling app called TBH in 2017 and shut it down several months later. Shortly after the acquisition was announced, the technology blogger Ben Thompson argued that antitrust regulators should step up to examine its competitive effects and perhaps even block the deal.    

    The FTC on Tuesday said it is seeking “to learn more about how small firms perform after they are acquired by large technology firms.” 


    edited February 2020 muthuk_vanalingamavon b7
  • Reply 15 of 22
    The FTC should be eliminated. There is no basis for these investigations and there are no monopolies except for any which are created via the heavy regulatory hand of government.
    edited February 2020
  • Reply 16 of 22
    Seriously... who gives a Fk.. if a small company wants to sell, then they sell. If they dont want to sell then they don’t sell. But most are just too greedy and want the money the big firms offer
    watto_cobra
  • Reply 17 of 22
    Rayz2016Rayz2016 Posts: 6,957member
    Hmmmm .... sounds like a fishing expedition
    I was coming here to say exactly the same thing. 
    watto_cobra
  • Reply 18 of 22
    Rayz2016Rayz2016 Posts: 6,957member
    mknelson said:
    mike1 said:
    I wonder how many of those companies were started and existed just to get to the point where they could be bought up by the "big boys". Ka-ching!

    They would have had to have some products/ideas of value first.
    If their ideas weren’t valuable they wouldn’t have been purchased. 

    The question is whether a startup that wants to be sold to a bigger fish means the act is “anti-competitive”. Not convinced. 
    In many cases this is the only way that some clever bods will see a return on their ideas. Beats is the clear exception, but in most cases, Apple acquisitions are based around expertise: the team doesn’t have a standalone product, so would have nothing to bring to the market anyway. The only other way to make money would be to sue for patent violations. 
    watto_cobra
  • Reply 19 of 22
    gatorguy said: 
    The FTC isn't convinced either... yet. That's one of the points this inquiry is meant to examine.

    EDIT: The Information made this observation:

    "One scenario that is likely of most concern to the agency is when big companies shut down smaller ones that they have purchased simply to snuff out a potential competitor. That’s in contrast to startups acquired simply for their talent—what are called “acqui-hires”—or those that flourish into much bigger phenomena (think YouTube, Instagram and WhatsApp). ” 


    The way Amazon bought Stanza and then killed it.  The best e-reader on the planet, bar none.  And Amazon killed it because it was better than the Kindle app.  More versatile, more open, easier to get books into than any e-reader I've come across to date.  Marvin comes close, but has too much interface.

    I need to learn to write mobile apps...
    watto_cobra
  • Reply 20 of 22
    gatorguygatorguy Posts: 23,176member
    Rayz2016 said:
    mknelson said:
    mike1 said:
    I wonder how many of those companies were started and existed just to get to the point where they could be bought up by the "big boys". Ka-ching!

    They would have had to have some products/ideas of value first.
    If their ideas weren’t valuable they wouldn’t have been purchased. 

    The question is whether a startup that wants to be sold to a bigger fish means the act is “anti-competitive”. Not convinced. 
    In many cases this is the only way that some clever bods will see a return on their ideas. Beats is the clear exception, but in most cases, Apple acquisitions are based around expertise: the team doesn’t have a standalone product, so would have nothing to bring to the market anyway. The only other way to make money would be to sue for patent violations. 
    You have no idea if that's true or not, simply your assumption based on... well probably nothing factual. 
    You haven't a clue about the 80+ acquisitions Apple has made this year that were never reported here at AI, and presumably that would be the tech company you know the most about.  I haven't a clue about Alphabet company purchases either. They've both spent $Billions on these small company buyouts that no one outside of the principles is aware of. 

    You don't know who they were, what they did, the technology they used or what they invented. You don't know if the purpose of the takeover was for improving a current product, absorbing IP to prevent someone else from using it, whether that company or team could have grown into a potential competitor for something Apple was developing, or even what the status was after the purchase. You don't have the faintest idea why Apple wanted them, whether for a product or a technology or a patent or a particular person or to prevent them going to someone else.  You've not a clue what the plan was, or what became of it all.

    The FTC doesn't know either because there were no requirements to report it.  Finding out is one of the goals of the inquiry. After that it can be decided if any particular action is needed or whether business should go on as is.

    Facts first and not act on guesses, right?
    edited February 2020
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