If big business mergers were a game of Pac-Man, where every pellet was a small company and each power pellet was a juicy merger, then tech companies would be playing a perfect game. In this admittedly overstretched metaphor, some U.S. regulators are desperately trying to pull the arcade cabinet’s chord, but it’s not going as well as some hoped.
We have billion dollar tech mergers being announced practically every week. On Thursday, Amazon announced it was signing a $3.9 billion merger deal with primary care practice company One Medical. Why does Amazon need medical care in its portfolio? Well the company wants to bridge into the online pharmacy and telehealth business. As if Amazon already didn’t control so many parts of our online experience.
Lina Khan, the Federal Trade Commission chair, has said that the best way to break up today’s big conglomerates is to look to the past, specifically to the early 1910’s and the age of Teddy Roosevelt trust busting. Despite her lofty goals, for much of year or so she’s been in charge of the agency that’s been stymied by partisanship among commissioners, with a 2-2 split along party lines. Republicans in Congress delayed a vote on a fifth commissioner that would give Democrats the majority until this past May.
Khan is an out-and-out critic of how large big tech has become. Amazon has been a particular boogeyman for Khan’s vision of the FTC. In fact it was her 2017 paper detailing how to best wrangle the tech behemoth that put her in the national spotlight. Without the majority, Amazon was able to gobble up MGM Studios for $8.5 billion. The FTC is moving along with an antitrust probe over that acquisition.
The FTC is building an antitrust case against Meta, though that could still be months down the pipe. Despite original thoughts that Khan would upend the status quo, there haven’t been any major setbacks for tech companies and their multi-billion dollar acquisitions. It’s been a critique of her’s that she’s tried to answer by saying there’s more action coming, just wait and see.
It’s a big problem for Khan, with not just big mergers causing consternation but the smaller acquisitions as well. The FTC’s 2021 review of its own logs revealed a sizable chunk of those acquisitions over $1 million went unreported to the commission. The agency has said it can look at past acquisitions for some of the largest tech companies, but still, big tech is ravenous for any new innovations they think will give them the edge. From January to September in 2021, The Washington Post reported that there were nearly 3,000 mergers and acquisitions that got little attention from either media or regulators.
Bloomberg reported that Khan’s efficacy in her position may be timed, especially if Republicans take back one or both houses of Congress after the November elections.
At the same time, massive antitrust bills are making their way through congress, and the debate over how “big” big tech can be seems to be coming to a head. The largest tech companies which have been acquiring tech companies both big and small could face a reckoning as bills like the The American Innovation and Choice Online Act could separate their marketing aspect from their tech facets. The bills have their supporters and detractors in Congress and in the media, and could come to a vote this summer.
And the largest tech companies are doing everything they can to stave off regulation and oversight. Apple spent nearly $2.5 million on lobbying to fight the bill. Meta reportedly spent $4 million on grassroots campaigns to get regular people to decry the new bill.
As Kahn and regulators are spoiling for a fight, here are few examples of the deals tech companies are looking to—or already have–inked since the start of this year.