Large technology companies are buying smaller competitors at a record pace this year. The British economic newspaper Financial Times (FT) informed about it. According to Refinitiv, technology companies have spent at least $ 264 billion (CZK 5.7 trillion) since taking over their potential competitors worth less than $ 1 billion since the beginning of the year. This is twice the previous record of 2000.
Since the beginning of this year, technology companies have signed a record 9,222 takeover agreements worth less than $ 1 billion each, according to France Télécom. “This wave of acquisitions is bad because it makes these corporations much stronger. It increases their power over the people who work for them, over the capital markets and over investors. At the same time, it blocks the type of competition that innovation can bring.” “said Barry Lynn, director of the Open Market Institute in Washington.
The wave of acquisitions comes at a time when big attention from regulators and politicians is increasingly focused on large technology companies. Companies such as Apple, Facebook, Google, Amazon and Microsoft are being accused of restricting competition and harming consumers through their business practices, the British newspaper writes.
For example, the US Federal Trade Commission (FTC) is investigating the Internet company Facebook for earlier takeovers of Instagram and WhatsApp. Last week, the commission published the results of a study on mergers and acquisitions in the technology sector from 2010 to 2019. According to commission chairwoman Lina Khan, the study shows how large technology companies systematically buy smaller start-ups to get rid of future competitors.
The FTC study showed, among other things, that Apple, Facebook, Google, Amazon and Microsoft made 819 acquisitions during the period under review, which were not recorded because they were not subject to reporting. At present, mergers and acquisitions worth less than $ 92 million do not have to be reported to US regulators. According to Khan’s study, he underlines the need to review the requirements for providing information on mergers and to address any shortcomings that allow some transactions to escape attention.