Coming on the heels of calls for greater government oversight of so-called "big tech," the Federal Trade Commission (FTC) announced on February 26, 2019, that it has created a Technology Task Force. According to the commission, the new task force will sit within the Bureau of Competition and will have wide-ranging authority to examine industry practices for potential anticompetitive behavior, advise FTC staff on review of technology-related mergers, and conduct retrospective reviews of previously-approved technology mergers.
According to FTC Chairman Joe Simons, "[t]he role of technology in the economy and in our lives grows more important every day… it makes sense for us to closely examine technology markets to ensure consumers benefit from free and fair competition." Simons, who was responsible for the creation of the FTC's Merger Litigation Task Force in 2002, pointed to that task force as an example of the new group's potential activities and objectives. The 2002 task force was widely credited with producing a revised, more economically informed approach to FTC merger review, leading to increased enforcement in some markets—particularly hospitals—but also resulting in the approval of some retail mergers that might have been challenged under prior standards (e.g., Federated/May).
The task force will include approximately 17 staff attorneys and will be led by Patricia Galvan, who is currently the deputy assistant director of the Mergers III Division, and Krisha Cerilli, who is currently counsel to Bureau of Competition Director Bruce Hoffman. Galvan is a longtime FTC career lawyer who participated in managing the commission's closely-watched 2014 Zillow/Trulia merger investigation, while Cerilli was part of the FTC's litigation team during the FTC's successful 2016 effort to block the merger of Staples and Office Depot. The task force will report to Bureau Director Bruce Hoffman and to his deputies, including Deputy Director Gail Levine and newly-named Associate Director for Digital Markets Daniel Francis, who currently serves as Hoffman's senior counsel. According to Hoffman, the Technology Task Force will focus on competition issues, not consumer protection. However, the task force will investigate issues such as data and consumer privacy to the extent that those issues affect competition.
In a potentially significant development for large technology companies, Hoffman confirmed during a press conference that the task force would also review consummated mergers. Hoffman declined to name any specific transactions that the FTC plans to investigate, but stated that all remedies, including forced divestitures, were possible in response to a finding that a prior acquisition was anticompetitive. Hoffman was asked and declined to comment regarding whether the FTC would re-investigate Facebook/Instagram, which the FTC approved in 2012.
The FTC's Technology Task Force is part of a growing global trend towards jurisdictions creating tech-specific investigative teams, which has led to high-profile sectoral inquiries in Europe (Digital Single Market), the UK (Competition in the Digital Economy and Disinformation and 'Fake News'), Australia (Digital Platforms Inquiry), and Germany (sector inquiry into online advertising). This trend will likely continue, as global regulators seek to respond to political pressure to address the economic power of large technology firms.
For more information about the FTC's Technology Task Force, please contact any member of the antitrust practice at Wilson Sonsini Goodrich & Rosati.
