The Federal Trade Commission has announced a broad inquiry into historical acquisitions by large technology companies, seeking information about transactions that fell below the Hart-Scott-Rodino notification thresholds and were therefore not subject to pre-merger review. The action signals a significant shift in the Commission’s approach to technology sector antitrust enforcement and raises questions about the viability of past deal structures going forward.
The “Killer Acquisition” Concern
At the heart of the FTC’s inquiry is the theory that large platform companies have systematically acquired nascent competitive threats before they could develop into significant rivals — so-called “killer acquisitions.” Critics of this framing argue that many such acquisitions have produced substantial consumer benefits and that the evidence for systematic competitive harm is limited. The Commission’s study is intended to build the evidentiary foundation for potential legislative or regulatory action.
Implications for Dealmakers
Technology companies considering acquisitions — particularly acquisitions of early-stage companies with innovative but not yet fully commercialized technologies — should expect a more demanding HSR review process and a greater likelihood of second requests. Parties to deals that have already closed should be aware of the FTC’s expanded interest in post-closing market developments. Documentation of pro-competitive rationale, prepared contemporaneously with the transaction, continues to be best practice.
Snow+Snow’s antitrust practice advises clients on merger review strategy, HSR compliance, and civil investigative demand responses. We are available to assist companies in the technology sector with antitrust risk assessment both at the deal stage and in the context of ongoing regulatory inquiries.
