Since the Federal Trade Commission is led by Lina Khan, the air seems to have definitely changed. Borrowing the definition given in recent decades to Margaret Tatcher, the Iron Lady (in this US case) is turning the big American companies upside down by investigating their possible adoption of anticompetitive and anticompetitive behaviors .
The latest analysis in chronological order is was recently presented by the FTC, and concerns the results of a study on the acquisitions made in recent years by the largest technology platforms in the country “ which did not request reporting to antitrust authorities at the FTC and the Department of Justice “.
NOTE: Hart-Scott- Rodino Act provides that the acquisition of a company must be notified to the FTC and the antitrust division of the Department of Justice. This law “ establishes the waiting periods that must elapse before such acquisitions can be consummated and authorizes law enforcement to suspend such periods until the companies will not provide additional information on the possibility that the proposed transaction substantially reduces competition in violation of Section 7 of the Clayton Act “. Whether or not you are obliged to report the acquisition to the FTC or the DoJ depends on the value of the acquisition itself . If this does not exceed a certain threshold, companies are exempted from communicating it and are not required to notify HSR.
DONE THE LAW, FOUND THE DECEPTION
Needless to say, the usual suspects ended up in the FTC’s sights: Alphabet, Amazon, Apple, Facebook and Microsoft . And it is not fury , it is simply the five largest capitalization companies of the United States market. The survey analyzed 616 transactions equal to or greater than 1 million dollars and concerned the period between 2010 and the 2019.
“ This study highlights the systemic nature of the acquisition strategies of these companies “, explains President Lina Khan. “ It highlights how they have devoted enormous resources to the acquisition of start-ups, patent portfolios and entire teams of technologists and how they have been able to do so to a great extent part beyond our competence “. In other words, the FTC allegedly exposed common and widespread commercial behavior : to escape the controls of antitrust laws, large companies tend to make more small acquisitions . Following are the main results:
- 94 transactions on 616 have exceeded the threshold set by the Hart-Scott-Rodino Act. some cases, even if the threshold is exceeded, it is possible not to notify the FTC if certain conditions for the exemption occur.
- In the 36% of the cases the buyer has assumed debts or liabilities (or part of these). If this additional expense had been added to the transaction value, the HSR threshold would have been exceeded by three times.
- the 79% of the transactions envisaged deferred payments to managers or founders. If added to the amount paid for the acquisition, in many of these cases the HSR threshold would have been exceeded.
- 3 out of 4 transactions include non-compete clauses for founders and key managers.
- the 65% of the transactions provided for the payment of a sum for the acquisition between 1 and 25 Millions of dollars.
- In the 39, 3% of the cases the acquired companies had less than 5 years of life.
- the year in which more acquisitions were recorded was 2014: 79.