FTC is investigating Big Tech's talent acquisition deals in US
What's the story
The US Federal Trade Commission (FTC) is investigating major technology companies that are opting to hire employees from start-ups instead of acquiring the companies directly. The practice, called "acqui-hiring," involves paying for a start-up's technology and talent without buying the whole company. FTC Chair Andrew Ferguson revealed this in an interview with Bloomberg Television.
Regulatory concerns
Acqui-hiring: A potential loophole in merger reviews
Ferguson said the FTC is looking into acqui-hiring deals to ensure they aren't being used as a way to bypass the agency's merger review process. He said, "We are beginning to examine these acqui-hires to make sure they are not an attempt to get around the merger review process." The move comes amid growing concern over antitrust practices in the tech industry.
Notable cases
High-profile acqui-hiring deals under scrutiny
The investigation comes after a series of high-profile acqui-hiring deals. Last month, NVIDIA struck a deal to license chip technology from start-up Groq and hire its CEO Jonathan Ross. Similarly, Microsoft's top AI executive was acquired through a $650 million deal with a start-up. Meta also spent to hire Scale AI's CEO without acquiring the company.
Policy impact
Biden administration's antitrust enforcement influences tech companies
Ferguson blamed the Joe Biden administration's aggressive antitrust enforcement for the rise in acqui-hiring practices among tech companies. The investigation into these deals is part of a wider effort by the FTC to tackle potential anti-competitive behavior in the technology sector. This comes after President Donald Trump fired two Democratic commissioners from the agency last year.