What you need to know
- The FTC issued orders to Microsoft and four other companies to study how big tech companies work.
- The move falls under an act that does not require studies to have a "specific law enforcement purpose."
- The FTC will use the studies to help determine if more companies should have to notify the FTC about more transactions.
The FTC can conduct "wide-ranging" searches without a "specific law enforcement purpose," so these orders are not part of an investigation of a crime or wrongdoing. FTC Chairman Joe Simons explains the purpose of the studies, "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."
Companies only have to give notice of transactions over a certain size. One purpose of these studies is to determine if more companies should have to notify the FTC about more transactions. The studies will also look at how small firms perform after being acquired, and provide a better understanding of large company's acquisition activity.
The FTC will also use these studies to help determine if companies are making "potentially anticompetitive acquisitions of nascent or potential competitors that fall below HSR filing thresholds."
