FTC to Take a Closer Look at How Tech Giants Swallow the Competition

The Federal Trade Commission (FTC) has decided to take a closer look at the acquisition practices of several large technology companies. When the DC Voice ran “What the Tech Giants Will Learn from Standard Oil and AT&T” in December of 2018 we highlighted the fact that there were “over 300 combined acquisitions over the past 10 years. Acquisitions across several social media platforms creating a virtual lock on avenues into the social media landscape.” Now the FTC is taking a closer look to determine whether there needs to be even more scrutiny on deals being made.

The FTC’s mission is to “protect consumers and competition by preventing anticompetitive, deceptive, and unfair business practices through law enforcement, advocacy, and education without unduly burdening legitimate business activity.” In a consumer-centric economy, it may not seem like such a big deal as new technologies are spawned seemingly overnight. In the short term, it’s great. However, the less competition, the fewer options consumers have. The fewer options, the more price gouging becomes a problem. Have you ever wondered why a device that can be built for mere pennies winds up costing several hundred, if not thousands of dollars? It’s more than simple supply and demand; it’s a shrinking competitive landscape.

The “Who Owns Who?” chart from 16Best  exemplifies how consolidated the technology playing field is. But why should you care as a consumer? “Competition in America is about price, selection, and service. It benefits consumers by keeping prices low and the quality and choice of goods and services high.” That’s a conclusion from the FTC in Competition Counts: How Consumers Win When Businesses Compete. It goes on to highlight its role to “promote healthy competition and challenges anticompetitive business practices to make sure that consumers have access to quality goods and services, and that businesses can compete on the merits of their work.” 

There is also the increasing loss of privacy in the technology arenas as your data flows through a series of partner companies and organizations. If you’ve ever taken the time to review the privacy notice you receive from a credit card company or other vendors you’ll notice that there is always the question of sharing your data with partner companies. Pick any one company from the chart above and figure out how many other organizations have access to your data that you may not be aware of. And this is just technology companies. If you expand that out to other industries…you get the picture.

The bottom line is that we need to be concerned at how big these tech companies grow and how they squeeze out the competition. The more they squeeze out the competition the more powerful they grow, the more easily shape they shape our buying patterns, impact our wallets, and control the marketplace.  The marketplace of ideas must remain open to all newcomers.

“Digital technology companies are a big part of the economy and our daily lives… 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.” – FTC Chairman Joe Simons

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FTC to Examine Past Acquisitions by Large Technology Companies

The biggest tech companies in the world have bought up a lot of smaller startups