Denver, Colo. (September 16, 2021) - On September 15, 2021, the Federal Trade Commission (FTC) published a report summarizing its findings from a study it performed regarding acquisitions made by five large technology firms over a 10-year period that were not reported to the federal U.S. antitrust agencies under the Hart-Scott-Rodino (HSR) Act.

The FTC study, which commenced in February 2020 under Special Orders issued by the FTC, involved non-HSR reported acquisitions by technology giants Alphabet, Inc.,, Inc., Apple Inc., Facebook, Inc. and Microsoft Corp. (collectively, the Respondents) and covered transactions consummated between January 1, 2010 and December 31, 2019. The FTC report noted that the Respondents are the five largest public U.S. companies by market capitalization. The report publishes the results of the FTC's analysis on an aggregated, and, therefore, anonymous basis. Further, the FTC study was intended to provide background and findings from the data provided by the Respondents, not to provide a basis for evidence in an adjudicatory proceeding. 

The FTC's Special Orders required each of the Respondents to identify transactions not reported to the FTC and U.S. Department of Justice under the HSR Act and to provide information similar to that requested on the HSR notification and report form. The Special Orders also required the Respondents to provide other data and documents regarding their non-HSR Act acquisitions, including information regarding non-compete provisions and deferred or contingent compensation. 

Among the key findings made by the FTC in its report are the following:

  • The Respondents reported 616 non-HSR reportable transactions above $1 million.
  • The total number of transactions per calendar year across the Respondents ranged from 43, at its lowest, to 79, at its highest.
  • Of these transactions, 65% were between $1 million and $25 million.
  • Roughly two-thirds of the acquired entities were domestic entities.
  • In roughly one-third of the transactions the acquirer assumed some amount of debt or liabilities.
  • Nearly 80% of the transactions involved deferred or contingent compensation to founders or key employees of the acquired entities.
  • More than 75% of the transactions included non-compete clauses for founders and key employees of the acquired entities.

It is noteworthy to mention that, as to the last key finding, the FTC continues to be critical of the widespread use of non-competition agreements and their alleged collective and cumulative harm to U.S. labor markets. This same point was raised in President Biden's July 2021 Executive Order on Promoting Competition in the American Economy.

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