On February 26, 2019, the Federal Trade Commission (FTC) announced the formation of the Technology Task Force, which will target any anticompetitive conduct in the technology sector. In particular, the task force will be focused on reviewing new mergers as well as reevaluating already completed mergers of any size. For consummated mergers, the task force has the authority to reconsider prior decisions and seek the full set of remedies (including divestiture) that would have been available during the initial review of the transaction in question.
In the past few years, the FTC has been criticized for failing to curtail perceived anticompetitive M&A activity and monopolistic behavior by large technology companies. Meanwhile, European regulators have leveed fines and launched investigations into companies for alleged anticompetitive practices. This announcement also follows a series of public hearings on Competition and Consumer Protection in the 21st Century, which the FTC hosted in the fall of 2018. These hearings included a three-day event focused on the potential for collusive conduct among technology companies and new frameworks for evaluating acquisitions of emerging competitors in the evolving digital marketplace. According to FTC Chairman Joseph Simons, the task force is “the next step” in this effort by the FTC to “closely examine technology markets to ensure consumers benefit from free and fair competition.”
Chairman Simons’ prior work at the FTC involved launching the Merger Litigation Task Force, which was charged with reinvigorating the FTC’s merger review processes and enforcement actions. The creation of the Technology Task Force appears to be a similar move to focus the FTC’s knowledge and approach to transactions in high-tech industries.
The creation of the task force follows the January 28, 2018 Statement of Commissioner Rebecca Slaughter in In the Matter of Sycamore Partners, Staples, and Essendant (FTC File No. 181-0180) calling for more retrospective review of completed mergers. In that statement, Commissioner Slaughter called for the FTC “to commit to a retrospective investigation of the merger that will facilitate the Commission’s ability to take any necessary enforcement action, including against any anticompetitive conduct by the post-merger firm.” Commissioner Slaughter also “applaud[ed] and join[ed] . . . calls for retrospective review [of mergers] generally,” despite acknowledging that “these retrospective investigations will require significant resources.”