The Federal Trade Commission (FTC) issued 6(b) orders to some of the country’s largest technology companies on February 11.
The agency is seeking information on unreported acquisitions with the goal of deepening its understanding of the competitive landscape in the technology sector.
Section 6(b) of the Federal Trade Commission Act (the FTC Act) empowers the FTC to conduct broad-based studies and seek various types of information. The FTC can conduct these studies even without a law enforcement purpose. As part of these studies, the FTC issues Section 6(b) orders that are typically wide-ranging requests for documents and data.
The February 11 6(b) orders seek information on acquisitions by large technology companies. These 6(b) orders are broad, focusing on all aspects of certain transactions that the companies completed between January 1, 2010 and December 31, 2019.
Companies are only required to notify the FTC and the Department of Justice about mergers and acquisitions that meet certain criteria. If these criteria do not apply, companies do not need to report, and the transactions may close without government clearance. The FTC has expressed interest in learning about unreported acquisitions, the strategies behind them, and whether the acquisitions and related agreements might cause competitive concerns even if they are not reportable.
More 6(b) orders to come?
A press release from two commissioners indicated that more 6(b) orders may be forthcoming, in particular for healthcare companies. Commissioners Christine Wilson (a Republican) and Rohit Chopra (a Democrat) affirmed their support for the FTC’s study of M&A activity in the technology industry. They also encouraged the FTC to start a similar 6(b) analysis of M&A activity in healthcare services, citing activity in markets for dialysis facilities, pharmaceuticals, and hospitals.
Given this move by the FTC, and the comments by this bipartisan pair of commissioners, healthcare and life sciences companies may wish to plan for the likelihood that more 6(b) orders are on the horizon.
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