OK...'Looking to Clamp Down' but they don't > An FTC study showed how big Silicon Valley companies bought startups to eliminate future competitors

Statement: "Tech mergers and acquisitions of all sizes have reached new highs in 2021, partly because companies bolstered digital capabilities as millions of people embraced the Internet and ecommerce during the pandemic.

I think of serial acquisitions as a Pac-Man strategy—the collective impact of hundreds of smaller acquisitions can lead to a monopolistic behemoth

 

Big tech companies snap up smaller rivals at record pace

"Pac-Man" buying spree comes as US regulators look to clamp down on some acquisitions.

Kiran Stacey, James Fontanella-Khan, and Stefania Palma of FT - 9/20/2021, 8:39 AM

 

Insert "The world’s largest technology companies have snapped up smaller rivals at a record pace this year in a buying spree that comes as US politicians and regulators prepare to crack down on “under the radar” deals.

Data from Refinitiv analyzed by the Financial Times show that tech companies have spent at least $264 billion buying up potential rivals worth less than $1 billion since the start of 2021—double the previous record registered in 2000 during the dotcom boom.

The glut of acquisitions comes amid much tougher scrutiny from the White House, regulators and members of Congress, who have accused large technology companies—particularly Apple, Facebook, Google, Amazon, and Microsoft—of stifling competition and harming consumers.

The Federal Trade Commission is investigating Facebook’s long-completed acquisitions of Instagram and WhatsApp, and the organization has warned that it could scrutinize other transactions even after they have gone through. It has the power to unwind deals if it deems them illegal and to block others in the future. . .

TRUST-BUILDING EXERCISE?

The FT’s data analysis shows that despite such warnings, the dealmaking has increased pace since the end of the report’s timeframe. Since the start of the year, tech companies have inked a record 9,222 transactions to buy start-ups worth less than a billion dollars, about 40 percent above the 2000 levels.

Barry Lynn, director of the Washington-based Open Markets Institute, said: “This was entirely foreseeable—in hard times, the companies which are already entrenched get that much more entrenched.

“This dealmaking is bad because it makes these corporations that much more powerful. It increases their power over the people who work for them, over capital markets and investors, and it blocks off the kind of competition that can bring innovation.”