How the New FTC Technology Task Force Could Crush Already-Closed Mergers

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Technology giants should consider that they have been put on notice. An announcement was made on Tuesday, February 26, 2019, by the Federal Trade Commission (FTC) that its Bureau of Competition is creating a task force dedicated to monitoring competition in U.S. technology markets. The FTC’s new Technology Task Force also will investigate any potential anticompetitive conduct in those markets and will take enforcement actions when warranted. While it is far too soon to speculate what the targets and implications would be, the reality is that technology giants now have a reason to fear further reviews, potential fines, and even potentially face future break-ups.

What all of those enforcement actions will be remains undefined at this time. Still, technology giants now have a formal watchdog in their industry and this will create yet one more regulatory review hurdle for when technology giants want to merge or make acquisitions.

24/7 Wall St. has featured the top technology companies as a part of this review. After all, they dominate the markets and it’s rather obvious that the FTC doesn’t go after small cases. So far these technology giants’ share prices do not seem to be reacting negatively to the task force announcement.

The FTC release specified that the new task force will conduct prospective merger reviews in the technology sector — but it specified that this will also cover reviews of consummated technology mergers.

How to retroact certain mergers is never an easy topic. Still, it has been done before and this could set the stage for the FTC to potentially be able to retroactively de-merge some companies.

The FTC’s Technology Task Force will draw upon existing staff and expertise and will focus on technology-related sectors of the economy. The FTC specified that this includes markets in which online platforms compete and will be modeled on the FTC’s Merger Litigation Task Force which was launched in 2002. The aim of the technology markets task force is said to ensure that they are operating within antitrust laws and to take action where they are not.

Tuesday’s announcement showed that the new merger task force will be led by Patricia Galvan, the current Deputy Assistant Director of the Mergers III Division, and by Krisha Cerilli, currently Counsel to the Director. This unit team will also include approximately 17 staff attorneys with expertise in complex product and service markets and ecosystems. The task force will also include a Technology Fellow to offer technical assistance and expertise to support investigations.

The task force will be overseen by Director Bruce Hoffman, Deputy Director Gail Levine, and Associate Director for Digital Markets Daniel Francis. will work closely with economists from the FTC’s Bureau of Economics and will coordinate with the FTC’s Bureau of Consumer Protection who also focus on technology platforms.

The areas and markets of concern were outlined in technology and now in the media and communications sectors, as follows:

  • online advertising;
  • social networking;
  • mobile operating systems and apps;
  • and platform businesses.