FTC launches new tech monopoly watchdog

The Federal Trade Commission announces:

The Federal Trade Commission’s Bureau of Competition announced the creation of a task force dedicated to monitoring competition in U.S. technology markets, investigating any potential anticompetitive conduct in those markets, and taking enforcement actions when warranted.

The task force is being pulled together with existing resources, the FTC said, and will consist of 17 staff attorneys.

Via the FTC’s Twitter thread, here’s the most interesting element to this:

“Reviews of consummated tech mergers” in the online space could open a Pandora’s Box. With US senators suggesting Facebook needs to be broken up, you can bet the Instagram/Whatsapp/Facebook unity will be high on the list of cases being examined.

What will be interesting, I think, is any sign that the FTC will start looking more smartly at acquisitions of early stage companies. When Facebook bought Instagram, back in 2012, the photo company had just 13 employees – it was not, at that time at least, a social networking superpower.

Historically the FTC (and other agencies like it in the wider world) has been set up to examine the impacts of already-major companies coming together. In tech, it’s more complicated than that – Facebook’s dominance has been about spotting big hits early on before they had a chance to compete. Then, it either buys them (Instagram) or replicates key features (Snapchat).

But, if the FTC was to disrupt that exit process, it could be counter-intuitive. A lot of VC money is stumped up on the basis that companies will a) go public or b) be acquired. Depending on how the SEC plays this, scenario B might become a lot more difficult.