U.S. regulators announced Tuesday that they are demanding information about past mergers from Amazon, Apple, Facebook, Microsoft, and Google parent company Alphabet as part of an investigation into whether the tech giants broke federal antitrust laws.
The Federal Trade Commission will probe mergers made by the five mammoth tech companies over the last decade, particularly their acquisitions of smaller startups. Some of those deals were small enough that the tech giants were not required to report them at the time to the FTC for scrutiny regarding competition concerns.
Regulators have now issued investigative subpoenas requesting documents on the acquisition strategies employed by Amazon, Apple, Facebook, Microsoft, and Alphabet to absorb startups and their accompanying data that could potentially compete with them. The broad probe is a type of investigation called a 6(b) inquiry, the results of which are published in a study rather than resulting in law enforcement action necessarily.
“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,” read a statement from FTC Chairman Joe Simons.
The FTC’s new subpoenas come as the powerful tech companies face heavy criticism and scrutiny from a plethora of regulators around the country, including the Justice Department and state attorneys general, amid concerns that the companies have ballooned over the last ten years because they simply bought up their competition. The FTC has looked especially closely at Facebook’s acquisition of WhatsApp in 2012 and Instagram in 2014.
On Monday, the Justice Department asked Congress for 71 percent more funding for the department’s antitrust division for fiscal year 2021, $53 million up from $31 million this year, as regulators up their investigations into the tech companies.
Some critics of big tech, however, hedged on praising the FTC’s move, saying that investigations are a start but action must follow.
“I welcome this announcement but it’s no substitute for action,” said Senator Richard Blumenthal, a Connecticut Democrat. “I’ve advocated for some time that there needs to be this kind of scrutiny, and it needs to be followed with enforcement.”
Democratic presidential candidate Senator Elizabeth Warren has even called for the tech companies to be broken up, calling them “monopolies” that have “bulldozed competition, used our private information for profit … and stifled innovation.”