FTC plans to probe major tech firms’ acquisition strategies
The Federal Trade Commission will announce Monday that it's launching a new inquiry into the privacy and data collection practices of major tech firms including Amazon, TikTok owner ByteDance, Twitter, YouTube and Facebook as well as its subsidiary WhatsApp, Axios has learned.
The big picture: The move comes amid broader scrutiny for the industry and appears to be a wide-reaching inquiry into everything major tech companies know about their users and what they do with that data, as well as their broader business plans.
The Federal Trade Commission this week announced another set of probes to add onto the heaping mound of antitrust investigations the nation's biggest tech firms now face. This time around, they're digging into a decade's worth of acquisitions that were small enough to escape scrutiny the first time around but may have proven to have big consequences after the fact.
In December, the Federal Trade Commission sued to block Nvidia's $40 billion acquisition of Arm, saying the deal would give one of the largest chip companies control over the computing technology and designs that rival firms rely on to develop their own competing chips.
Investments and strategies are under scrutiny. Importantly for private equity firms, some Second Requests are now reaching beyond the portfolio company involved in the deal to include the sponsor itself. PE firms are being asked about their acquisition pipelines, plans for tuck-ins and add-ons, and industry track record. While this level of scrutiny was previously found in regulated industries, it is now becoming commonplace across the board. In addition, the agency has proposed (but not finalized) a rule requiring buyers to disclose information on their parent companies and subsidiaries, which could increase the burden for private-equity making premerger HSR filings.