FTC Will Review Past Mergers by Facebook, Google and Other Big Tech Companies (washingtonpost.com) 35
The new effort by the Federal Trade Commission will require all five big technology companies to provide information about the smaller players they've purchased over the past 10 years, including documents for deals that may not have been large enough to warrant deep, closer inspection by government watchdogs at the time. From a report: The records the FTC amasses could ultimately influence its thinking about Silicon Valley and its size, sparking investigations, resulting in tough punishments or prompting the commission to seek further enforcement powers from Congress once it concludes its work. "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," FTC Chairman Joe Simons said in a statement.
The inquiry announced Tuesday differs from a traditional investigation: Using its so-called 6(b) authority, the FTC can embark on wide-ranging reviews of entire industries without necessarily bringing a law-enforcement action. The agency in the past has invoked such powers to delve deep into drug prices, alcohol ads and gas gouging, experts said, often ushering about major changes in the markets and companies it studies. With big tech, the FTC is particularly interested in the smaller startups purchased by Apple, Amazon, Facebook, Google and Microsoft. Such deals typically aren't large enough to require companies under law to report them to agencies like the FTC, which would then review them for competition concerns. The document demands sent to all five tech giants require them to demystify these transactions, explaining their acquisition strategies and the ways they ingested startups -- and the data they amassed -- into their own services.
The inquiry announced Tuesday differs from a traditional investigation: Using its so-called 6(b) authority, the FTC can embark on wide-ranging reviews of entire industries without necessarily bringing a law-enforcement action. The agency in the past has invoked such powers to delve deep into drug prices, alcohol ads and gas gouging, experts said, often ushering about major changes in the markets and companies it studies. With big tech, the FTC is particularly interested in the smaller startups purchased by Apple, Amazon, Facebook, Google and Microsoft. Such deals typically aren't large enough to require companies under law to report them to agencies like the FTC, which would then review them for competition concerns. The document demands sent to all five tech giants require them to demystify these transactions, explaining their acquisition strategies and the ways they ingested startups -- and the data they amassed -- into their own services.
Need to do this with the media industry too (Score:5, Insightful)
They need to review in the same way the media distribution companies and cell phone companies the same. Not just the big tech companies. Hell, I even say do it for every proposed merger. Otherwise they don't have the whole picture of the consolidation that is going on out there.
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In order to prevent monopolies, they need to have the whole picture of the consolidation. Consolidation is the road to monopoly.
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It's not about who bought who. It's about total market share. Consolidation is one road to monopoly, but not the only one. And you don't need to even consider how you go there, you just have to look at the destination. If it looks like a duck and quacks like a duck, you don't need to consider it's life history to determine its duckness.
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Acquisitions vs. Internal Growth (Score:4, Insightful)
How much of the growth in these companies has been through acquisition instead of internal growth? Google bought You Tube, Android, and Google Voice, but those were all more than ten years ago. The only major acquisition I can think of is Nest. I'm under the impression that Microsoft's major product lines are all internal development. Amazon's major acquisition would be Ring; most of their core business hasn't been acquired. I'm not aware of acquisitions that Apple has made.
Facebook, however, has bought lots of companies, so I think they'll end up being the largest focus of this probe.
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I'm not aware of acquisitions that Apple has made.
Apple has a fair number of acquisitions [wikipedia.org] but nothing on the level of a merger. It seems like the largest one was Beats (the headphone company) for $3 billion in 2014. Maybe the closest to a merger would be the NeXT acquisition back in 1997 for $400 million. They've acquired a lot of smaller companies/teams (a lot of stuff related to chip development, mapping, and AI) and they purchased Intel's modem unit just this past year. I recall that they also bought iTunes (forget what it was called prior to that) way
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Buying their parts suppliers is a lot different from buying competitors or new products. That's a good point on Beats; I should have thought of that. I thought iTunes was internally developed along with the original iPod, but I'll welcome correction if I'm wrong there. You're also right the Apple acquired companies to create and improve Apple Maps.
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So I guess their acquisition last month of a completely independent AI analytics firm with nothing to do with Apple is their part supplier?
Really the reality is everyone is constantly acquiring companies multiple times a year to improve their product lineup or to improve a product already in their lineup.
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1. Fingerworks. This gave them ground floor IP on multitouch patents. And the geniuses behind Multiworks stayed at Apple for quite some time, continuing to refine the algorithms behind the technology.
2. The application that became iTunes that you are thinking of was SoundJam MP. It was developed for the Diamond Rio player as an interface front end that allowed you to rip MP3 files from an audio CD and load them to your MP3 player. I was an early adopter myself.
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I'm under the impression that Microsoft's major product lines are all internal development.
They acquired DOS, PowerPoint, Visio, and Skype but those except Skype were all ages ago. Oh, and Yammer more recently as well. They have a long list of acquisitions over the years: https://en.wikipedia.org/wiki/... [wikipedia.org]
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and LinkedIn
and GitHub
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Google, aka Alphabet, has an impressive list of acquisitions, seems to be a lot more than Facebook! Apple and Amazon are no slouches either.
The thing is, most of these (for all of those companies) are small companies few people have heard of so the acquisition went largely unnoticed. And that seems to be part of the point of this
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I'm under the impression that Microsoft's major product lines are all internal development.
Your impression is wrong. Although MS did have a quiet year last year only acquiring 9 other companies in 2019: https://en.wikipedia.org/wiki/... [wikipedia.org]
It may not be as overt as the Facebook / Whatsapp merger, but a large portion of Microsoft's growth is done by embedding the technology it acquired through other businesses and merging it all together.
All these companies are constantly buying others at a rate that they all warrant their own Wikipedia page:
https://en.wikipedia.org/wiki/... [wikipedia.org]
https://en.wikipedia.org/wi [wikipedia.org]
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I am not optimistic (Score:1)
I fear that this review might be a sham, for when the FCC is controlled by Pai, so it can be summarily approved. Then, when the FCC is under more reasonable control, the precedent is already there.
Re:I am not optimistic (Score:4, Funny)
You do know that the FCC and the FTC are two different things, don't you?
Too Big to Merge (Score:3)
If companies can get to the point of being too big to fail, then perhaps they should also be too big to merge. As companies get larger, we could have a limit on the size (value) of acquisitions that gets smaller.
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A company too big to fail is too big to exist. We need some serious antitrust action in every field of business!
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If companies can get to the point of being too big to fail ...
Right, because our civilization would collapse if Facebook were to fail.
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Wow. If you'd bother to read past the point where you inserted those ellipses you'd know you are not contradicting a single thing the OP said. No one said anything about civilization or anything else ending if Facebook failed. Just the fucking opposite, bud. Try reading the entire post before replying.
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Split off Android and Blink/Chromium please (Score:2)
GOOD. FUCKING. LUCK. (Score:2)
Review past mergers (Score:4, Insightful)
It would be good if they look at where companies basically lied about investment/jobs/rates to get the merger. I just have a feeling this is cover to go after political enemies or solicit donations/bribes for the party/person in power
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Current commission is two democrats and three republicans. It's an executive branch agency, like almost all federal agencies. Trump could fire of the commissioners at any time, and replace them with an "interim" commissioner. He's been doing that a lot recently.
In my mind, there is no question this is all part of the crusade of revenge that Trump has just embarked on. He got his acquittal, and now everyone who said or did anything to upset him will pay for it, and the republicans party will stand by and che
Humphrey's Executor v. United States (1935) (Score:4, Interesting)
Roosevelt tested that back in the 1930s.
SCOTUS ruled that the President cannot fire an FTC commissioner. They also ruled it's not an executive branch agency.
Of the five, three have previously served in a role in which they were appointed by a politician, indicating potentially they are sympathetic to that party. For the other two, I'm not sure how you are assigning them a particular political party.
I looked to see if there was at least sentence you said that was in any way correct, but I'm afraid I couldn't find anything resembling fact in any of your sentences.
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Thanks for the information, that's actually fairly heartening to know. Glad I was mistaken.
Sorry about the last sentence. I was rude (Score:2)
Sorry I was rude at the end.
My rudeness was highlighted by your gracious reply.
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Yeah, I have to admit, I just kinda read the first few paragraphs of the wiki article...
Warning shot from Trump Campaign (Score:3)
What has changed recently to make big tech a threat? If they are a threat today, they were a threat yesterday. Why are you only voicing concern now? Trump is a vindictive individual. I think he's unhappy Google doesn't suppress all the criticism of him. Sorry buddy, algorithms are algorithms. No one wants to cheat them to appease your ego.
Notice how Twitter, his social media platform of choice, will probably not be affected, but Amazon and Google will!
Big Tech has been pretty neutral, politically. They are in the business of selling goods and services, they don't give a rat's ass who is in the white house. Most of them get more money overseas anyway. They are viewing the global market and generally have historically acted in the best interest of sales and revenue.
Sometimes what is best for the customer isn't best for the Trump campaign, so think this is just a warning shot to remind them he has the ability to introduce regulations and make their lives hell. "Fall in line with my whims or I will bring the hammer down on your company."
Hey Mr Trump, Mr Simons (FTC head)...as an insider, please let me say...do not kick that hornet's nest. You have no idea how much power SV wields and you WILL NOT win this trade civil war.
Those CEOs are scared shitless of regulation and will act out if you provoke them. Tech companies are responsible for a LOT of good paying middle class jobs bringing in lots of money globally. I very much like how they've kept their lobbying pretty minimal and focused to only things that very much impact them directly. I DO NOT want them embedded in Washington the way big pharma and big oil are today....life will only get worse for us if Silicon Valley discovers how much power they actually have. They earn a LOT of money and will be the growth engine of the future for American jobs....the high paying ones that are paying the majority of the taxes and propping up the non-tech sectors.
Tread lightly. You won't make big tech your bitch...it will not work out as you hope and thus will be born a political presence no one wants....that will long outlast you and your children. Nothing good will come of this. Leave big tech out of the political scene. Don't threaten them. They will take it seriously. They are some of the smartest, most creative, and most focused minds on the planet. They will out-think you. They will out-strategize your army of supporters. While I have no love for you and would love to see you learn your lesson, I don't want them realizing what they could do if they put their minds and dollars to it....the problems will outlive you.
Enjoy your acquittal...focus on your election...leave the tech industry alone. Life will be better for everyone that way. I want Facebook, Microsoft, and Google out of politics...don't make it in their interest to get involved!
Good luck with congress. (Score:1)
I'm sure the Dem controlled congress will be very receptive to the Republican stacked FTC.