# Platforms, 2010–2019: (2021)

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A7dff7da2968c4df3

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

Non-HSR Reported
Acquisitions by
Select Technology
Platforms, 2010–2019:
An FTC Study

September 2021

NON-HSR REPORTED ACQUISITIONS BY SELECT TECHNOLOGY PLATFORMS,
2010-2019
A REPORT OF THE
FEDERAL TRADE COMMISSION
SEPTEMBER 15, 2021

Lina M Khan, Chair
Noah Joshua Phillips, Commissioner
Rohit Chopra, Commissioner
Rebecca Kelly Slaughter, Commissioner
Christine S. Wilson, Commissioner
Jen Howard
Erie Meyer
David Robbins
Holly Vedova
Samuel Levine
Marta Wosińska
Reilly Dolan
Randolph W. Tritell
Jeanne Bumpus
Sarah Mackey
Lindsay Kryzak
April Tabor
John Krebs

Chief of Staff
Chief Technologist
Executive Director
Acting Director, Bureau of Competition
Acting Director, Bureau of Consumer Protection
Director, Bureau of Economics
Acting General Counsel
Director, Office of International Affairs
Director, Office of Congressional Relations
Acting Director, Office of Policy Planning
Director, Office of Public Affairs
Secretary of the Commission
Chief Privacy Officer

Bilal Sayyed

Former Director, Office of Policy Planning*

Report Drafters and Contributors
Liad Wagman, Office of Policy Planning
Katherine Ambrogi, Office of Policy Planning
Jacob Hamburger, Bureau of Competition
Robin Moore, Acting Chief of Staff, Bureau of Consumer Protection
William Adkinson, Office of Policy Planning
Elizabeth Gillen, Bureau of Competition
Elizabeth Jex, Office of Policy Planning
Jaime Taronji, Office of Policy Planning
Casey Triggs, Office of Policy Planning (detail from Consumer Financial Protection Bureau)
Ruth Yodaiken, Office of Policy Planning
Jin-Hyuk Kim, Office of Policy Planning (contractor)
Adrian Cabrera, Office of Policy Planning (intern)
Henry Nolan, Office of Policy Planning (intern)
*Mr. Sayyed was director during parts of the report period.

Non-HSR Reported Acquisitions by Select Technology Platforms, 2010-2019:
An FTC Study
1. Introduction
In February 2020, the Federal Trade Commission (“FTC” or “Commission”) issued
Special Orders to five large technology firms that have made numerous acquisitions in recent
years, requiring them to provide information about prior acquisitions not reported to the federal
U.S. antitrust agencies under the Hart-Scott-Rodino (“HSR”) Act.1 The orders required Alphabet
Inc. (“Alphabet,” including Google), Amazon.com, Inc. (“Amazon”), Apple Inc. (“Apple”),
Facebook, Inc. (“Facebook”), and Microsoft Corp. (“Microsoft”) to provide information and
documents on the terms, scope, structure, and purpose of transactions that each company
consummated between January 1, 2010 and December 31, 2019 for which the company did not
file an HSR notification form. The Commission issued these orders under Section 6(b) of the
FTC Act, which authorizes the Commission to conduct wide-ranging studies that do not have a
specific law enforcement purpose.
The orders were designed to help the FTC deepen its understanding of large technology
firms’ acquisition activity including examining the trends in acquisitions and the structure of
deals. Various Commissioners have stated that mergers and acquisitions in the technology
industry are an area of significant importance to the agency.2 At the FTC’s 2018-2019 Hearings
on Competition and Consumer Protection in the 21st Century, participants also noted that major
technology firms made hundreds of acquisitions, with many occurring in the past five to ten
years.3 In addition to the Commission, the Antitrust Division of the U.S. Department of Justice4

1

Press Release, FTC, FTC to Examine Past Acquisitions by Large Technology Companies (Feb. 11, 2020),
https://www.ftc.gov/news-events/press-releases/2020/02/ftc-examine-past-acquisitions-large-technology-companies.
2
See, e.g., Rebecca Kelly Slaughter, Comm’r, Fed. Trade Comm’n, Keynote at 6th Bill Kovacic Antitrust Salon:
Where is Antitrust Policy Going? 2 (Sept. 24, 2018),
https://www.ftc.gov/system/files/documents/public_statements/1412806/slaughter__closing_remarks_for_6th_annual_bill_kovacic_antitrust_salon_9-24-18.pdf (“We are seeing more and more
mergers and conduct matters with technology-related issues such as data collection, intellectual property, and
network effects.”); Rohit Chopra, Comm’r, Fed. Trade Comm’n, Remarks at Silicon Flatirons Conference 2 (Feb.
10, 2019),
https://www.ftc.gov/system/files/documents/public_statements/1453633/remarks_of_commissioner_chopra_at_silic
on_flatirons.pdf (“[W]e need to ask ourselves whether certain business practices and merger activity are really
promoting innovation or simply allowing corporate royalty to hold on to their reign.”); Noah Joshua Phillips,
Comm’r, Opening Address at Chatham House Competition Policy 2020 Conference 2 (Nov. 10, 2020),
https://www.ftc.gov/system/files/documents/public_statements/1582986/phillips_remarks_chatham_house_11-1020.pdf (“Enforcers and policymakers should focus more on issues characteristic of technology markets: acquisitions
of nascent competitors, two-sided markets, zero price markets, and so forth.”).
3
See, e.g., Sally Hubbard, Remarks at FTC Hearings of Competition & Consumer Protection in the 21st Century,
Session #3, Tr. at 265 (Oct. 17, 2018),
https://www.ftc.gov/system/files/documents/public_events/1413712/ftc_hearings_session_3_transcript_day_3_1017-18fullupdated.pdf.
4
See e.g., Press Release, Dep’t of Justice, Justice Department Reviewing the Practices of Market-Leading Online
Platforms (July 23, 2019), https://www.justice.gov/opa/pr/justice-department-reviewing-practices-market-leadingonline-platforms.

1

and key Congressional leadership5 have all expressed concerns regarding the number of
acquisitions by major technology companies, as have other competition agencies around the
world.6
Following the issuance of the Special Orders, FTC staff collected and analyzed data and
documents from the respondents to learn more about the relevant transactions. Staff also crossreferenced the material obtained through the Special Orders with publicly available data sources
to analyze recipients’ transactions. This report publishes the results of that analysis on an
aggregated, and therefore anonymized, basis. To protect the confidentiality of the information
submitted to the Commission, this report does not publish any confidential information from the
recipients of the Special Orders.7
This report adds to existing empirical research on transactions by technology companies
by analyzing a number of trends and patterns identified in the data. In particular, the report
quantifies and categorizes the pace, the size distribution of transactions in dollar terms, the types
5

See, e.g., STAFF OF H. COMM. ON THE JUDICIARY, 116TH CONG., INVESTIGATION OF COMPETITION OF DIGITAL
MARKETS: MAJORITY STAFF REPORT AND RECOMMENDATIONS 44 (2020),
https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf?utm_campaign=4493-519 (“Leading
economists and antitrust experts have expressed concern that serial acquisitions of nascent competitors by large
technology firms have stifled competition and innovation.”); KEN BUCK, ET AL., H. COMM. ON THE JUDICIARY, 116TH
CONG., THE THIRD WAY: ANTITRUST ENFORCEMENT IN BIG TECH 9 (2020),
https://buck.house.gov/sites/buck.house.gov/files/wysiwyg_uploaded/Buck%20Report.pdf.
6
Other competition agencies around the world have also expressed concerns. For example, the European
Commission has proposed the Digital Markets Act, containing a set of rules for “gatekeepers” and consequences for
non-compliance. Eur. Comm’n, The Digital Markets Act: ensuring fair and open digital markets,
https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/digital-markets-act-ensuring-fair-andopen-digital-markets_en#new-rules-in-a-nutshell (last visited Sept. 2, 2021). Germany’s Commission on
Competition Law 4.0 proposed “monitoring and assessment of cases involving the early acquisition of innovative
start-ups” and evaluation of the current system of ex-ante merger control. FED. MINISTRY FOR ECON. AFFAIRS &
ENERGY, A NEW COMPETITION FRAMEWORK FOR THE DIGITAL ECONOMY: REPORT BY THE COMMISSION
‘COMPETITION LAW 4.0’ 7 (2019), https://www.bmwi.de/Redaktion/EN/Publikationen/Wirtschaft/a-newcompetition-framework-for-the-digital-economy.pdf?__blob=publicationFile&v=3. See also UNLOCKING DIGITAL
COMPETITION: REPORT OF THE DIGITAL COMPETITION EXPERT PANEL 12, 95 (2019),
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/785547/unlocking
_digital_competition_furman_review_web.pdf (last visited Sept. 2, 2021) (UK’s Digital Expert Panel
recommending that identified digital companies ought to make the U.K. Competition and Markets Authority aware
of every intended acquisition to assist it with monitoring and selecting digital cases for investigation.); KOREAN
FAIR TRADE COMMISSION (KFTC), CHAIRPERSON'S MESSAGE TO EXPLAIN THE PURPOSE AND DIRECTION OF THE “ACT
ON FAIR INTERMEDIATE TRANSACTIONS ON ONLINE PLATFORMS,” PROPOSED BY THE KFTC 1, (Sept. 28, 2020),
https://ftc.go.kr/solution/skin/doc.html?fn=a96717a996e790c90b01a7bc4c1f77d946be46d29989d2d5c23b7f464793
dfba&rs=/fileupload/data/result/BBSMSTR_000000002401/, (last visited Sept. 8, 2021) (stating that
“there are anti-competitive concerns that monopolistic platforms are preventing new entrants from entering the
market while removing potential competitors by acquiring them.”); AUSTRALIAN COMPETITION & CONSUMER
COMMISSION, DIGITAL ADVERTISING SERVICES INQUIRY: INTERIM REPORT 88, Dec. 2020,
https://files.lbr.cloud/public/2021-01/Digital%20Advertising%20Services%20Inquiry%20%20Interim%20report.pdf?qSKQBUcxWvgg8v7Xr8McY0FwxpXL1Pgw=, (last visited Sept. 8, 2021) (identifying
a “pattern of consolidation” in advertising technology services); COMPETITION COMMISSION SOUTH AFRICA, ONLINE
INTERMEDIATION PLATFORMS MARKET INQUIRY, TERMS OF REFERENCE, DRAFT FOR PUBLIC COMMENT 1, (Feb. 19,
2021), http://www.compcom.co.za/wp-content/uploads/2021/02/OIPMI-Draft-ToR-19-02-2021.pdf (last visited
Sept. 8, 2021) (identifying a possible “deliberate strategy to… acquire competitive threats”).
7
15 U.S.C. § 46(f).

2

of transactions, and the number of non-HSR reportable transactions collectively by the five
respondents. As far as the acquired companies, the report further examines the acquisition terms
regarding their debts or liabilities as of the time of their acquisition, any deferred or contingent
compensation offered to key employees and founders as part of the acquisition, the age of the
acquired companies as of the time of the consummation of their acquisition, and the number of
their full-time non-sales employees that went on to work for the acquiring respondent after the
acquisition. This study intends to provide background and findings from this data set, not to
provide a basis for evidence in an adjudicatory proceeding.
The report provides certain data on transactions that exceed the HSR Size of Transaction
(SOT) threshold. To be clear, however, transactions exceeding the SOT threshold may not have
been notified because the Size of Person (SOP) test was not met or one of the statutory or
regulatory exemptions applied. In general, unless an exemption applies, premerger notification is
required if the transaction meets three tests: (1) the Commerce Test (which is routinely met), (2)
the Size of Transaction Test, and (3) the Size of Person Test. To meet SOT, the transaction
value, as calculated in accordance with the HSR rules, must be over $50 million (as adjusted,
currently $92 million). There is no filing obligation for transactions with a value below SOT. If
the value of the transaction is more than $50 million (as adjusted) but $200 million (as adjusted,
currently $368 million) or less, SOP, which is a set of requirements about the value of the
parties’ revenues and/or assets, must also be met to make the transaction reportable.
Even if a transaction meets SOT and SOP (if necessary), it need not be reported if it is
exempt under one of the statutory or regulatory exemptions. For example, an acquisition of a
foreign issuer or foreign assets may not need to be reported if the buyer is not acquiring control
or if the issuer or assets have “insufficient nexus” to the United States, as determined on the basis
of the revenues generated by the issuer or by the assets from sales in or into the United States.
While this report does not make recommendations or conclusions regarding the HSR
thresholds, it does analyze the nonreportable transaction data of respondents and releases trends
and patterns relating to these transactions. The study intends to inform ongoing discussions
among policymakers, academics, and other stakeholders.
2. Overview
a. Respondents
The Special Order respondents—Alphabet/Google, Amazon, Apple, Facebook, and
Microsoft—are five of the largest public U.S. companies by market capitalization.8 These firms
are among the most significant technology companies operating in the world and publicly
available information indicates each firm has engaged in a high volume of acquisitions.

8

U.S. Companies by Market Capitalization, https://companiesmarketcap.com/usa/largest-companies-in-the-usa-bymarket-cap/ (last visited Sept. 2, 2021).

3

i. Alphabet/Google
Alphabet is a multinational internet technology company headquartered in Mountain
View, California and founded in 1998.9 At publication of this report, Alphabet was the thirdlargest U.S. company by market capitalization.10 Alphabet’s core business lines are organized
under its Google subsidiary, which offers a variety of services and products that enable users to
obtain access to websites, photos, videos, and other sources of information across the internet. It
primarily generates revenues from these businesses through the sale of online advertising.11
Some of these services and products include:








Search, an internet search engine;
YouTube, a video sharing service;
Google Drive, a cloud storage service;
Google Maps, a location information application;
Gmail, an email service;
Android, a mobile operating system; and
Chrome, an internet browser.

Google also operates enterprise-ready cloud services, which includes Google Cloud
Platform and Google Workspace. It generates revenues from these services primarily through
fees received from customers.12
Alphabet reported revenues of $182.5 billion in 2020, over $181 billion of which came
from its Google segments. Google sales of advertising accounted for approximately 80% of
Alphabet’s total revenues.13 It reported revenues of about $29.3 billion in 2010, with
approximately two-thirds coming from Google website advertising revenue and 30% coming
from Google Network members’ website advertising revenue.14 At the end of 2020, Alphabet
employed over 135,000 individuals, up from nearly 24,400 in 2010.15
ii. Amazon
Amazon is a multinational e-commerce company headquartered in Seattle, Washington
and was founded in 1994. At publication of this report, Amazon was the fourth-largest U.S.
company by market capitalization.16 A key component of Amazon’s business is its online retail
platform for goods and services, selling private-label products and products Amazon has
9

In 2015, Google restructured itself and Alphabet became the successor parent organization. Before then, Google
was the parent organization. Alphabet, Annual Report (Form 10-K) 25-26 (Feb. 2, 2021).
10
U.S. Companies by Market Capitalization, https://companiesmarketcap.com/usa/largest-companies-in-the-usa-bymarket-cap/ (last visited Sept. 2, 2021).
11
Alphabet, Annual Report (Form 10-K) 6, 33 (Feb. 2, 2021).
12
Id. at 6-7.
13
Id. at 32-33.
14
Alphabet, Annual Report (Form 10-K) 53 (Feb. 11, 2011).
15
Alphabet, Annual Report (Form 10-K) 9 (Feb. 2, 2021); Alphabet, Annual Report (Form 10-K) 8 (Feb. 11, 2011).
16
U.S. Companies by Market Capitalization, https://companiesmarketcap.com/usa/largest-companies-in-the-usa-bymarket-cap/ (last visited Sept. 2, 2021).

4

purchased for retail sale, as well as third-party products for which Amazon offers an e-commerce
platform. As part of its online platform business, it offers Amazon Prime, a fee-based
membership program that provides users with services such as shipping, streaming movies and
TV shows, music, and books. Amazon’s primary source of revenue is the sale of a wide range of
products and services to customers.17 In 2017, Amazon bought Whole Foods, a specialty grocery
with locations throughout the country. The company also sells its own electronic devices and
produces media content.18 Amazon has also opened physical retail stores, including grocery
stores under the banner Amazon Fresh.
Amazon also operates Amazon Web Services (AWS), which offers a suite of enterprise
cloud computing services, “including comput[ing], storage, database, analytics, and machine
learning, and other services.”19 In 2020, Amazon reported net sales of $386 billion. Net sales
from its AWS business accounted for $45.4 billion, while all other segments accounted for
$340.7 billion.20 In 2010, Amazon’s net sales were $34.2 billion; it did not report net sales
figures for AWS separately in 2010.21 At the end of 2020, Amazon had approximately 1,298,000
full-time and part-time employees, not including independent contractors or temporary
personnel.22 At the end of 2010, Amazon had approximately 33,700 full-time and part-time
employees.23
iii. Apple
Apple is a multinational consumer electronics company headquartered in Cupertino,
California and founded in 1977. At publication of this report, Apple was the largest U.S.
company by market capitalization.24 The company “designs, manufactures and markets
smartphones, personal computers, tablets, wearables and accessories, and sells a variety of
related services.”25 Apple sells its products through its retail and online stores, direct sales force,
and indirect distribution channels. These products include:





The iPhone line of smartphones;
The Mac line of personal computers;
The iPad line of multi-purpose tablets; and
A Wearables, Home, and Accessories group of products, which includes AirPods
wireless headphones and Apple Watch.

Apple also offers a variety of consumer-facing services, including:

17

Amazon, Annual Report (Form 10-K) 19, 25 (Feb. 2, 2021).
Id. at 3.
19
Id.
20
Id. at 25.
21
Amazon, Annual Report (Form 10-K) 18 (Jan. 27, 2011).
22
Amazon, Annual Report (Form 10-K) 4 (Feb. 2, 2021).
23
Amazon, Annual Report (Form 10-K) 4 (Jan. 27, 2011).
24
U.S. Companies by Market Capitalization, https://companiesmarketcap.com/usa/largest-companies-in-the-usa-bymarket-cap/ (last visited Sept. 2, 2021).
25
Apple, Annual Report (Form 10-K) 1 (Oct. 29, 2020).
18

5






Various platforms that allow customers to discover and download applications and digital
content, such as the App Store;
Digital content streaming services, such as Apple Music and Apple TV+;
Cloud computing services; and
Payment services.

The company reported total net sales of $274.5 billion in 2020, about half of which is
attributable to iPhone net sales.26 In 2010, Apple had $65.2 billion in total net sales, of which
$25.2 billion is attributable to the iPhone.27 In 2020, Apple generated $53.8 billion in net sales
from its services category, a 16% increase over 2019 net sales ($46.3 billion), which also
represented a 16% increase over 2018 net sales ($39.8 billion).28 The company had
approximately 147,000 full-time equivalent employees, up from the 46,600 full-time equivalent
employees and 2,800 full-time equivalent temporary employees and contractors it had in 2010.29
iv. Facebook
Facebook is a multinational social media company headquartered in Menlo Park,
California and founded in 2004. At publication of this report, Facebook was the fifth-largest U.S.
company by market capitalization.30 According to Facebook, the company builds social media
products that operate on mobile devices, personal computers, virtual reality headsets, and inhome devices.31 These social media products enable individuals to share information about
themselves and their activities (including pictures and videos), connect with other individuals,
and communicate news and other information. Substantially all of the company’s revenues
derive from advertising placement sales.32 Facebook’s products and services include:






Facebook, a personal social networking service;
Instagram, a photo-based personal social networking service;
Messenger, a mobile messaging service;
WhatsApp, a mobile messaging service; and
Facebook Reality Labs, offering augmented and virtual reality products.33

As of December 31, 2020, Facebook had 2.8 billion monthly active users (“MAUs”),
compared to 845 million MAUs on December 31, 2011.34

26

Id. at 21.
Apple, Annual Report (Form 10-K) 33 (Oct. 27, 2010).
28
Apple, Annual Report (Form 10-K) 21 (Oct. 29, 2020).
29
Apple, Annual Report (Form 10-K) 4 (Oct. 29, 2020); Apple, Annual Report (Form 10-K) 10 (Oct. 27, 2010).
30
U.S. Companies by Market Capitalization, https://companiesmarketcap.com/usa/largest-companies-in-the-usa-bymarket-cap/ (last visited Sept. 2, 2021).
31
Facebook, Annual Report (Form 10-K) 7 (Jan. 27, 2021).
32
Id.
33
Id.
34
Facebook, Annual Report (Form 10-K) 52 (Jan. 27, 2021); Facebook, Annual Report (Form 10-K) 5 (Feb. 1,
2013).
27

6

Facebook had about $86 billion in revenue in 2020, up from about $2 billion in 2010.35 It
employed 58,604 people globally as of December 31, 2020, compared to the 2,661 people it
employed full-time as of June 30, 2011.36
v. Microsoft
Microsoft is a multinational software company headquartered in Redmond, Washington
and founded in 1975. At publication of this report, Microsoft was the second-largest U.S.
company by market capitalization.37 The company develops and supports “software, services,
devices, and solutions,” and offers “an array of services, including cloud-based solutions that
provide customers with software, services, platforms, and content.”38 Microsoft generates
“revenue by offering a wide range of cloud-based and other services to people and businesses;
licensing and supporting an array of software products; designing, manufacturing, and selling
devices; and delivering relevant online advertising to a global audience.”39 Some of the key
products and services it offers include:









Office, a suite of productivity applications;
LinkedIn, a social networking service for professionals;
Dynamics, a line of business applications;
Cloud computing services, including Azure;
Windows, a personal computing operating system;
Personal computing devices, including Surface;
Xbox, a video game platform; and
Bing, a search engine.40

Microsoft reported $168 billion in revenue in 2021, compared to $62.5 billion in revenue
in 2010.41 As of June 30, 2021, it had approximately 181,000 full-time employees, including
103,000 in the United States.42 As of June 30, 2010, it had approximately 89,000 full-time
employees, including 54,000 in the United States.43

35

Facebook, Annual Report (Form 10-K) 50 (Jan. 27, 2021); Facebook, Annual Report (Form 10-K) 34 (Feb. 1,
2013).
36
Facebook, Annual Report (Form 10-K) 10 (Jan. 27, 2021); Facebook, Quarterly Report (Form 10-Q) 48 (July 31,
2012). Facebook completed its initial public offering in May 2012, so earlier headcount reports are not publicly
available. Facebook, Quarterly Report (Form 10-Q) 8 (July 31, 2012).
37
U.S. Companies by Market Capitalization, https://companiesmarketcap.com/usa/largest-companies-in-the-usa-bymarket-cap/ (last visited Sept. 2, 2021).
38
Microsoft, Annual Report (Form 10-K) 3 (July 29, 2021).
39
Id. at 39.
40
Id. at 10-15.
41
Microsoft, Annual Report (Form 10-K) 34 (July 29, 2021); Microsoft, Annual Report (Form 10-K) 21 (July 30,
2010).
42
Microsoft, Annual Report (Form 10-K) 8 (July 29, 2021).
43
Microsoft, Annual Report (Form 10-K) 14 (July 30, 2010).

7

b. Special Orders
The Special Orders required each respondent to identify transactions not reported to the
FTC and the U.S. Department of Justice under the HSR Act, and to provide information similar
to that requested on the HSR notification and report form.44 The Orders also required companies
to provide other data and documents on their corporate acquisitions, including information on
non-compete provisions and deferred or contingent compensation. FTC staff met with the
respondents regularly throughout the data collection and provision period and reviewed
responses as they arrived on a rolling basis. Staff then processed and analyzed the material from
those responses. This report reflects components of that analysis and identifies several patterns,
on an aggregated basis, in the parties’ combined transaction history.
3. Analysis
The below section describes the aggregate analysis of data produced, revealing a number
of patterns regarding the total number of transactions, transaction types, and sizes. It also
quantifies the prevalence of a number of common practices found in the merger agreements,
including the use of non-compete provisions and deferred or contingent compensation for the
acquired firms’ founders and key employees. The analysis also revealed a significant amount of
information about each acquired firm, including its country of origin, debts and liabilities, the
number of employees joining the acquirer after the transaction, and its age. Finally, staff
categorized the transactions by sector to show the relationship between the number of
transactions made and industry developments.
Sections 6(f) and 21(d)(1)(B) of the FTC Act prohibit the Commission from disclosing
trade secrets or commercial or financial information that is privileged or confidential. Because of
this statutory prohibition, the Commission does not have discretion to disclose this type of
information.45 As a result, this report publishes data from all five respondents on an aggregated
basis. We share below the information that we can report publicly within these confidentiality
limitations.
a. Methodology
As part of its review, staff collected information from the respondents on several key data
points requested in the Special Order. This included, but was not limited to, information on:




The acquired entities (e.g., whether a target entity had any debts or liabilities at the time
of its acquisition);
The acquirers;
Parameters specific to each acquisition, such as the consummation date of the acquisition,
whether the merger agreements included non-compete clauses, whether the merger

44

Order to File a Special Report, FTC Matter No. P201201 (Feb. 10, 2020) [hereinafter Special Order],
https://www.ftc.gov/system/files/documents/reports/6b-orders-file-special-reports-technology-platformcompanies/6b_platform_study_sample_order.pdf.
45
15 U.S.C. § 46(f), 15 U.S.C. § 57b-2(d)(1)(B).

8



agreement stipulated deferred or contingent compensation for the target entity’s
employees and/or shareholders, as well as the type of the acquisition:
o Voting Security (Control)
o Voting Security (Minority)
o Asset
o Patent Acquisition
o Hiring Event
o Non-Corporate Interest (Control)
o Non-Corporate Interest (Minority)
o License
o Economic Interest; and
Post-acquisition outcomes (e.g., the number of employees from the target entity who
joined the acquirer after the acquisition).

After collecting the responsive material, staff processed and analyzed the data at both the
individual respondent level and collectively for the five respondents.46 As part of this analysis,
staff grouped acquisitions along various aspects of the transactions, including by:







respondent;
acquisition type;
transaction size;
calendar year;
whether the acquired firm was a domestic or foreign entity; and
nesting these various aspects (e.g., all Voting Security (Control) acquisitions within a
certain transaction size range, the number of employees who joined the acquiring firm
after an acquisition within a certain transaction size range) and determining the
correlation between certain aspects (e.g., were larger transactions more likely to include
non-compete clauses in their merger agreements and/or stipulate deferred or contingent
compensation for the founders and key employees of the acquired entities).

As part of the analysis, staff also collected additional data on the acquisitions from four
proprietary databases (PitchBook, S&P Global Market Intelligence 451 Research, Crunchbase,
and Refinitiv). Staff used the information collected to identify and advise respondents of any
potentially missing transactions to ensure the completeness of the information received. Staff
also used the information to determine the age of each acquired entity as of the time of its
acquisition, and to approximate an industry categorization of the target entities.47 Combined, this
additional information verified the universe of transactions reported as well as provided a basis
for additional groupings of transactions (e.g., by acquired entity age, by approximate industry
category) for analysis.

46

The percentages in this report’s figures may not necessarily add up to 100% due to decimal point rounding.
While some of this information would typically be available using HSR filings, none of the responsive
transactions were filed under HSR.

47

9

b. Transaction Types
The five respondents reported 819 total non-HSR reportable transactions over the 10-year period
for an average of approximately 164 transactions per respondent.48 Each transaction was
categorized according to a primary type: Voting Security (Control), Voting Security (Minority),
Asset, Patent Acquisition, Hiring Event, Non-Corporate Interest (Control), Non-Corporate
Interest (Minority), License, and Economic Interest.49 Of the 819 transactions, the largest
category was Voting Security (Control) at 382 acquisitions, followed by 150 Asset acquisitions,
101 Hiring Events, and 91 Patent Acquisitions. In the charts that follow, the standard deviations
provide a measure of the amount of variation or dispersion across respondents. A lower standard
deviation indicates that the values from the five respondents tend to be close to the respective
average, while a higher standard deviation indicates that the individual values are spread out over
a wider range.

Figure 1: Transaction Types
Type of Transaction

Total

Voting Security (Control)
Asset
Hiring Events
Patent Acquisitions
Voting Security (Minority)

382
150
101
91
45

48

Average Per
Respondent
76.4
30
20.2
18.2
9

Standard
Deviation
32.7
9.5
16.9
16.2
9.7

The 819 transactions omit approximately 50 additional smaller transactions below $1 million, 160 financial
investments, and Patent Acquisitions below $2.5 million.
49
As defined within the Special Order, see supra note 44. Voting securities (control) is defined under the meaning
of 16 C.F.R. § 801.1 et seq., which described that voting securities means any securities which at present or upon
conversion entitle the owner or holder thereof to vote for the election of directors of the issuer, or of an entity
included within the same person as the issuer. Control is described as either holding 50 percent or more of the
outstanding voting securities of the issuer or, in the case of an unincorporated entity, having the right to 50 percent
or more of the profits of the entity, or having the right in the event of a dissolution to 50 percent or more of the
assets of the entity. An alternative definition of control involves having the contractual power to designate 50
percent or more of the directors of a for-profit or not-for-profit corporation, or 50 percent or more of the trustees in
the case of trusts that are irrevocable and/or in which the settlor does not retain a reversionary interest. Voting
Securities (Minority) are Voting Securities that are not control Voting Securities. Asset acquisition is holding, in the
aggregate, any of the assets of another Entity that, at the time of acquisition, represented any of: (1) 10% or more of
the assets of the acquired Entity, or of a division, subsidiary, office or product, research or development group; or
(2) assets sufficient to constitute a business or operating unit. Patent acquisition is the purchase of one or more
patents that is not otherwise defined as another category of acquisition. Hiring Event means any instances where,
within a one-year period, the company hired 25 percent or more non-sales employees of an Entity, division, office,
or subsidiary of an Entity, or product, research or development group of an Entity. Non-Corporate Interest means an
interest in a Non-Corporate Entity, with control and minority having the same meaning as under Voting Securities.
License is obtaining exclusive agreements to intangible property that is not an acquisition. Economic Interest means
the right to receive profits or assets upon their distribution, either directly or indirectly, or upon dissolution of the
Issuer or Entity; or the right to receive the gains from the appreciation in the value of any interest, including Voting
Security or interest, held in, or of, the Entity; or the responsibility for the losses associated with the change in value
of the Entity or value of any interest, including Voting Security or interest, in the Entity.

10

Non-Corporate Interest
(Control)
Non-Corporate Interest
(Minority)
License
Economic Interest
Total # of Transactions

27

5.4

2.8

12

2.4

3.2

8
3
819

1.6
0.6
163.8

3.2
1.2
70.2

Voting Security (Control) acquisitions, Asset acquisitions, and Hiring Events were the three most
common categories, comprising a combined 77.2% of the 819 total transactions.

Figure 2: Transaction Types
NCI,
Minority

License
1%

NCI, Control
3%

Economic Interest
<1%

Voting Security,
Minority
6%
Voting Security,
Control
47%

Patent Acquisitions
11%

Hiring Events
12%
Asset
18%

Excluding Hiring Events and Patent Acquisitions (which staff considered separately), for a
remaining total of 627 transactions, Voting Security (Control) and Asset acquisitions comprised
85% of the transactions, or 89% when including Non-Corporate Interest (Control) acquisitions.
c. Transactions by Year
Excluding Hiring Events and Patent Acquisitions, the total number of transactions per calendar
year across the five respondents ranged from 43 (in 2012) to 79 (in 2014), with corresponding
annual averages per respondent ranging from 8.6 (in 2012) to 15.8 (in 2014).

11

Figure 3: Number of Transactions Per Year (Total and Average Per Respondent)

2010
2011
2012
2013
2014
2015
2016
2017
2018
2019

Total (5
Respondents)
52
53
43
63
79
74
63
70
66
64

Average Per
Respondent
10.4
10.6
8.6
12.6
15.8
14.8
12.6
14
13.2
12.8

Standard
Deviation
7.9
9.9
3.6
5.5
8.1
7.3
4.1
4.7
5.5
5.8

The number of transactions per calendar year per individual respondent ranged from 2 to 31,
with the average annual number of transactions across respondents peaking in 2014 and
remaining relatively higher in 2015-2019 than in 2010-2013.

Figure 4: Total Number of Transactions Per Year
90
80
70
60
50
40
30
20
10
0
2010

2011

2012

2013

2014

2015

Total (5 Respondents)

12

2016

2017

2018

2019

d. Transaction Values
Focusing on transactions (excluding Hiring Events and Patent Acquisitions) above $1 million,
the following table reports information on the number of transactions in each transaction range,
where the HSR Size of Transaction (SOT) threshold is determined for each transaction
individually based on its consummation date (the HSR SOT threshold has increased annually
over the 2010-2019 time period).

Figure 5: Transactions by Transaction Range
Transaction Range
≥ $1 Million & < $5 Million
≥ $5 Million & < $10 Million
≥ $10 Million & < $25 Million
≥ $25 Million & < $50 Million
≥ $50 Million & < $HSR SOT
Threshold
≥ $HSR SOT Threshold
All Transactions

Total

Average

145
93
162
84
38

29
18.6
32.4
16.8
7.6

94
616

18.8
123.2

Standard
Deviation
13.9
8.3
8.0
8.4
4.8
10.8
48.4

%

Cumulative

23.54%
15.10%
26.30%
13.64%

23.54%
38.64%
64.94%
78.57%

6.17%
15.26%

84.74%
100.00%

Transactions in the $1-5 million range were more common than in the $5-10 million range, and
transactions in the $10-25 million range were more common than in the $25-50 million range. Of
all transactions (above $1 million, excluding Hiring Events and Patent Acquisitions), 65% were
between $1 million and $25 million.

13

Figure 6: Total Percent of Transactions by Transaction Range
100%
94

90%
80%

38

70%

84
≥ $HSR SoT Threshold

60%

≥ $50 Million & < $HSR SoT Threshold
≥ $25 Million & < $50 Million

162

50%

≥ $10 Million & < $25 Million
≥ $5 Million & < $10 Million

40%

≥ $1 Million & < $5 Million
93

30%
20%

145

10%
0%

The number of acquisitions in each transaction range fluctuated during 2010-2019, with
somewhat pronounced increases in the number of transactions in the $10-$25 million range and
the $50 million to the HSR SOT threshold range in later years relative to earlier years.

Figure 7: Number of Transactions Per Year by Transaction Size
Range
90

Number of Transactions

80
70
≥ $HSR SoT Threshold

60

≥ $50 Million & < $HSR SoT Threshold

50

≥ $25 Million & < $50 Million

40

≥ $10 Million & < $25 Million

30

≥ $5 Million & < $10 Million
≥ $1 Million & < $5 Million

20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

14

Asset and Control transactions (including Voting Security Control and Non-Corporate Interest
Control transactions) were the most common in each transaction range. For transactions
exceeding $5 million, the majority were Control transactions. Moreover, the share of Control
transactions consistently increases in the range of the transactions, comprising 90.4% of
transactions in the highest range (transaction sizes above the HSR SOT threshold). The Pearson
correlation50 between the logarithm of acquisition values and transactions being of Control
(either in Voting Security or Non-Corporate Interest), on a range of -1 to 1, with positive values
indicating positive correlation and vice versa, is 0.38 (with statistical significance at < 1%); that
is, transactions with higher purchase amounts are more likely to be Control acquisitions.

Figure 8: Transaction Type by Range

≥ $5 Million & < $10 Million

31.2%

61.3%

≥ $10 Million & < $25 Million

20.4%

71.0%

0.6%

2.5%

5.6%

≥ $25 Million & < $50 Million

21.4%

72.6%

1.2%

2.4%

2.4%

≥ $50 Million & < $HSR SOT Threshold

5.3%

84.2%

2.6%

5.3%

2.6%

≥ $HSR SOT Threshold

5.3%

90.4%

2.1%

2.1%

50

Voting Security
Minority

37.9%

Non-Corporate
Interest Minority

39.3%

License

Control Transactions
(Voting Security + NCI)

≥ $1 Million & < $5 Million

Transaction Range

Economic Interest

Asset

Transaction Type

5.5%

1.4%

15.9%
7.5%

Correlation measures a statistical relationship between two variables, where 1 indicates the strongest movement in
the same direction, -1 in the opposite directions, and 0 being no relation. The Pearson (point-biserial) correlation is a
special case of the correlation measure in which one variable is continuous (log of transaction size) and the other
variable is binary (0 or 1 indicator variable – in this case, of Control-type transactions).

15

e. Transactions, Domestic/Foreign
The majority of transactions in each transaction range (excluding Hiring Events and Patent
Acquisitions) were domestic.

Figure 9: Domestic and Foreign Transactions by Range
Transactions
≥ $1 Million & < $5 Million
≥ $5 Million & < $10 Million
≥ $10 Million & < $25 Million
≥ $25 Million & < $50 Million
≥ $50 Million & < $HSR SOT
Threshold
≥ $HSR SOT Threshold
Overall

Domestic Foreign
99
46
64
29
95
67
56
28
23
15
63
400

31
216

% Domestic
68.3%
68.8%
58.6%
66.7%
60.5%

% Foreign
31.7%
31.2%
41.4%
33.3%
39.5%

67.0%
64.9%

33.0%
35.1%

The share of domestic transactions in each transaction range were somewhat similar across the
different transaction ranges, ranging from 58.6% (for the $10-25 million range) to 68.8% (for the
$5-10 million range).

Figure 10: Percent of Domestic and Foreign Transactions by
Range
100.0%
90.0%
80.0%

31.7%

31.2%

68.3%

68.8%

33.3%

41.4%

39.5%

33.0%

70.0%
60.0%
50.0%
40.0%
30.0%

66.7%

58.6%

60.5%

67.0%

20.0%
10.0%
0.0%
≥ $1 Million
& < $5 Million

≥ $5 Million
≥ $10 Million
≥ $25 Million
≥ $50 Million
& < $10 Million & < $25 Million & < $50 Million & < $HSR Filing
Threshold
Domestic

16

Foreign

≥ $HSR Filing
Threshold

The higher number of transactions in the $1-5 million range than in the $5-10 million range, and
transactions in the $10-25 million range than in the $25-50 million range, extended to the
number of both domestic and foreign transactions. In addition, the highest numbers of domestic
transactions were in the $1 to $5 million and $10 to $25 million ranges, whereas the highest
number of foreign transactions was in the $10 to $25 million range.

Figure 11: Number of Domestic and Foreign Transactions by
Range
0

20

40

Domestic

Foreign

≥ $1 Million & < $5 Million
≥ $5 Million & < $10 Million
≥ $10 Million & < $25 Million
≥ $25 Million & < $50 Million
≥ $50 Million & < $HSR SoT Threshold
≥ $HSR SoT Threshold

17

60

80

100

120

f. Transactions with Debts/Liabilities
In 36% of the transactions (excluding Hiring Events and Patent Acquisitions), the acquirer
assumed some amount of debt or liabilities that the acquired entity had on its balance sheet. On
average, for each of the five respondents, 25.7% of the target entities they acquired had debts or
liabilities as of the time of the consummation of the transaction.

Figure 12: Percent of Transactions with
Debts/Liabilities
40.0%

36.0%

35.0%
28.8%

30.0%

25.7%

25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Total Across Respondents

Average Per Respondent

Standard Deviation

Of the transactions reported, three additional transactions would have exceeded the HSR SOT
threshold (i.e., in addition to the 94 transactions already above the HSR SOT threshold) at the
time of their consummation when adding the debts or liabilities to their purchase price (to
provide a measure of what the purchase price would have been with no debts or liabilities on the
acquired entity’s balance sheet). At the respondent level, this amounts to an additional 0.6
transactions per respondent on average, with a standard deviation of 1.2.

18

g. Transactions with Deferred/Contingent Compensation
A majority of transactions also used deferred or contingent compensation to founders and key
employees, with relatively small variation across the five respondents.

Figure 13: Percentage of Transactions with
Deferred/Contingent Payments
100.0%
90.0%
80.0%

79.1%

79.7%

70.0%
60.0%
50.0%
40.0%
30.0%
20.0%

12.2%

10.0%
0.0%
Total Across Respondents

Average Per Respondent

Standard Deviation

The Pearson correlation between the logarithm of the acquisition value and the acquisition
including deferred or contingent compensation is 0.28 (statistically significant at < 1%); that is,
higher value transactions were more likely to use deferred or contingent compensation.

19

Figure 14: Percentage of Transactions with Deferred/Contingent
Compensation by Transaction Range
100.00%

90.12%

90.00%
78.49%

80.00%

89.47%

87.23%

≥ $50 Million
& < $HSR SoT
Threshold

≥ $HSR SoT
Threshold

83.33%

70.00%
60.00%

56.55%

50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
≥ $1 Million
& < $5 Million

≥ $5 Million
≥ $10 Million
& < $10 Million & < $25 Million

≥ $25 Million
& < $50 Million

Of the transactions reported, nine additional transactions would have exceeded the HSR SOT
threshold (i.e., in addition to the 94 transactions already above the HSR SOT threshold) at the
time of their consummation when adding the deferred or contingent compensation (that is
separate, and in addition to their purchase price) to their purchase price. At the respondent level,
this amounts to an additional 1.8 transactions per respondent on average, with a standard
deviation of 2.7.

20

h. Transactions with Non-Compete Clauses
A majority of transactions, 76.7%, included non-compete clauses for founders and key
employees of the acquired entities, with relatively small variation in the percentage of
transactions that had non-compete clauses across the five respondents.

Figure 15: Percentage of Transactions with NonCompete Clauses in Merger Agreements
100.0%
90.0%
80.0%

77.3%

78.7%

70.0%
60.0%
50.0%
40.0%
30.0%
15.2%

20.0%
10.0%
0.0%
Total Across Respondents

Average Per Respondent

Standard Deviation

The Pearson correlation between the logarithm of acquisition values and the acquisitions that
include non-compete clauses for founders and key employees, on a range of -1 to 1, is 0.24
(statistically significant at < 1%); that is, higher value transactions were more likely to use noncompete clauses. This positive correlation is mostly driven by the smaller transactions of $25
million or less ─ the proportion of transactions with non-compete clauses roughly stabilizes for
larger transactions.

21

Figure 16: Percentage of Transactions with Specific NonCompete Clauses by Transaction Range
100.00%
87.65%

90.00%

80.95%

77.42%

80.00%

84.21%

85.11%

≥ $50 Million
& < $HSR SoT
Threshold

≥ $HSR SoT
Threshold

70.00%
60.00%

56.55%

50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
≥ $1 Million
& < $5 Million

≥ $5 Million
≥ $10 Million
& < $10 Million & < $25 Million

≥ $25 Million
& < $50 Million

i. Transactions by Employee Size (Full-Time, Non-Sales)
In Control and Asset transactions for all or substantially all of the assets of the acquired entity (or
a division, subsidiary, office, or product, research, or development team of the acquired entity),
the respondents reported the number of full-time non-sales employees, if any, that joined the
acquiring firm after the transaction was consummated. In the majority of transactions (a total of
419) for which the number of full-time non-sales employees were reported, the number of
employees were between 1 and 10. In addition, the employee counts are positively correlated
with the sizes of the transactions.

22

Figure 17: Relative Frequencies of Full-Time Non-Sales
Employees Ranges by Transaction Range
90

Number of Transactions

80

62.1%

70

84.6%

60
50
40

37.1%
55.3%

60.9%

86.7%

30
65.6%

31.3%

20

18.4%

14.1%

10

11.1%
2.2%

26.3%

25.0%

1.3%

6.3%

0.8%

1.6%

9.4%

0
≥ $1 Million
& < $5 Million

≥ $5 Million
& < $10 Million

≥ $10 Million
& < $25 Million

1-10

11-50

≥ $25 Million
& < $50 Million

51-100

≥ $50 Million
& < $HSR SoT
Threshold

≥ $HSR SoT
Threshold

100+

On a more granular level, the Pearson correlation between the logarithm of transaction values
and the logarithm of the number of full-time non-sales employees of the target entities who
joined the acquiring firm after the acquisitions of the target entities is 0.74 (significant at < 1%);
that is, larger transactions tended to be associated with more employees from the target entity
joining the acquiring firm.
j. Transactions by Target Age
Staff collected additional data on the founding date of the acquired entities (excluding Hiring
Events, Patent Acquisitions, and transactions below $1 million) from PitchBook, S&P 451
Research, and Refinitiv. Staff used this information to determine the age of the target firms as of
the time of the consummation of their acquisitions, adopting several approaches to determine a
target firm’s age: using each of the three data sources individually, as well as in combination. An
advantage of the latter is that more target firms are matched with founding dates; in the cases of
differing information about a target’s founding date in the three data sources, we incorporated
either the latest founding date or the earliest founding date (uniformly across all such cases). We
report the two approaches that utilize a combination of the three data sources, using the latest
founding date (the first approach below) and the earliest (the second approach below) founding
date in cases of differing information.

23

Figure 18: Transactions by Target Age Group (Using Latest Available Founding
Year When Information Differs)
Target Age Range
(Using Latest
Available)
< 5 years old
≥ 5 years old & < 10
years old
≥ 10 years old & < 15
years old
≥ 15 years old
Target Founded Date
Missing
Total # of Transactions

Total

% of Total

Average # Per
Respondent

Standard
Deviation

295
148

47.9%
24.0%

59
29.6

23.9
14.4

58

9.4%

11.6

8.3

34
81

5.5%
13.1%

6.8
16.2

3.0
7.8

616

As indicated above, when the founding year differed across the three databases, we used two
different approaches to analyze the number of acquisitions per calendar year in each age group.
This first approach above takes the latest available founding year (and hence the lowest age) for
these firms in cases of differing information.

Figure 19: Number of Transaction by Target Age Group (Using
Latest Available Founding Year When Information Differs)
≥ 15 years old
≥ 10 years old & < 15 years old
≥ 5 years old & < 10 years old
< 5 years old
Target Founded Date Missing
0

50

100

150

200

250

300

350

Under this first approach, the number of acquisitions in the youngest (< 5 years old) age group
exceeds the number of acquisitions in each of the other age groups.

24

Figure 20: Number of Transaction by Calendar Year (Using
Latest Available Founding Years When Information Differs)
90

Number of Transactions

80
70
60
50
40
30
20
10
0
2010

2011

< 5 years

2012

2013

≥ 5 years & < 10 years

2014

2015

2016

≥ 10 years & < 15 years

2017

2018

2019

≥ 15 years

missing

The number of acquisitions in the youngest age group (< 5 years old) fluctuated over time,
peaking in 2014. The number of acquisitions in other age groups tended to be higher in the later
years than in the earlier years.
The second approach uses the earliest available founding year (and hence the highest age when
information in the three databases differed) and results in some of the acquisitions shifting from
younger to older age groups. Under this second approach, the number of acquisitions in the
youngest (< 5 years old) age group also exceeds the number of acquisitions in each of the other
age groups. However, this approach results in a smaller number of acquisitions in the youngest
(< 5 years old) age group and larger numbers of acquisitions in all three other age groups.

Figure 21: Transactions by Target Age Group (Using Earliest Available Founding
Year When Information Differs)
Target Age Range
(Using Earliest
Available)
< 5 years old
≥ 5 years old & < 10
years old
≥ 10 years old & < 15
years old
≥ 15 years old
Target Founded Date
Missing
Total # of Transactions

Total

% of Total

Average # Per
Respondent

Standard
Deviation

242
171

39.3%
27.8%

48.4
34.2

19.0
18.8

63

10.2%

12.6

7.6

59
81

9.6%
13.1%

11.8
16.2

4.8
7.8

616
25

Figure 22: Number of Transaction by Target Age Group (Using
Earliest Available Founding Year When Information Differs)
≥ 15 years old
≥ 10 years old & < 15 years old
≥ 5 years old & < 10 years old
< 5 years old
Target Founded Date Missing
0

50

100

150

200

250

300

In summary, depending on the approach used, between 39.3% to 47.9% of transactions were for
target entities that were less than five years old at the time of their acquisition. This percentage
range could also be different (i.e., fall outside of this range), as the target entities in 13.4% of the
transactions did not have founding dates located in any of the three databases.

Figure 23: Number of Transaction by Calendar Year (Using
Earliest Available Founding Years When Information Differs)
90

Number of Transactions

80
70
60
50
40
30
20
10
0
2010

2011

< 5 years

2012

2013

≥ 5 years & < 10 years

2014

2015

2016

≥ 10 years & < 15 years

2017

2018

≥ 15 years

missing

2019

Under the second approach, the number of acquisitions in the youngest age group (< 5 years old)
also peaked in 2014, and the number of acquisitions in the other age groups again tended to be
higher in the later years than in the earlier years.

26

k. Transactions by Sector
Using information from the S&P 451 Research database, we assigned Primary Sector categories (Level 1 in the S&P taxonomy, which
is the broadest of four levels) to target entities in all categorized transactions (excluding Hiring Events and Patent Acquisitions) where
this information was available (it was not available for approximately 270 transactions). The eight categories with the highest number
of acquisitions, in descending order, were:
1.
2.
3.
4.
5.
6.
7.
8.

Mobility (mobile devices and device-based software and content);
Application Software (front-end applications such as CRM, ERP, SCM, BI, commerce and vertical business software);
Internet Content & Commerce (internet destination and internet-enabled services);
Infrastructure Management (software to control and manage IT infrastructure including software development, BPM,
virtualization and application performance and cloud management);
Information Management (software to control information flows including collaboration, email and data management and
retrieval);
Systems (computers, peripherals and control systems);
Security (IT security software and systems including physical security and surveillance); and
Media Technologies (systems to control VOD, broadcasting and streaming media, including set top boxes, video encoding and
production systems).

Figures 24-31 depict the total number of acquisitions per calendar year in each of these categories, along with some notable
technological events that pertain more specifically to each category.51

51

Events listed are based solely on public information and are included in order to provide context to Figures 24-31.

27

Figure 24: Number of Mobility Transactions Per Year
- Google introduced Google Nexus smartphone
- Apple introduced iPad
- Uber launched first in San Francisco
- Instragram released

Number of Transactions

20

- Apple CarPlay released
- Apple Pay announced
- Apple Watch released

- Pinterest launched iPhone app
- Snapchat launched app
- Apple launched iMessage
- Apple integrated Siri into iPhone
- Amazon introduced Kindle Fire tablet

15

- Google Assistant announced
- Instagram launched "Stories" feature
- Apple announced AirPods

- Apple launched standalone
Podcasts app
- Amazon released Kindle
Paperwhite

- Facebook launched Stories feature
- Apple announced FaceID for iPhone

10

5

0
2010

2011

2012

2013

2014

28

2015

2016

2017

2018

2019

Figure 25: Number of Application Software Transactions Per Year
16

- Minecraft released; acquired by
Microsoft in 2014
- Microsoft announced Windows 10

14
- Microsoft released
Windows 8

- Alphabet DeepMind's AlphaGo AI
defeated top ranked Go player

12

Number of Transactions

- Salesforce completed acquisition of
analytics platform Tableau

10

8

6

4

2

0
2010

2011

2012

2013

2014

29

2015

2016

2017

2018

2019

Figure 26: Number of Internet Content and Commerce Transactions Per Year
16

- Google Wallet launched
- Google launched Google+

- Google shuts down Google+

Facebook filed IPO

14

- Square launched Square Cash
- PayPal acquired Venmo

Number of Transactions

12

- Facebook launched Trending Topics feature

10

- Facebook introduced free friend-to-friend
payment service

8

- Bitcoin reached $10,000
for the first time

6
4
2
0
2010

2011

2012

2013

2014

30

2015

2016

2017

2018

2019

Figure 27: Number of Information Management Transactions Per Year
7
- Microsoft acquired Skype
- Microsoft launched Office 365 globally
November 2011: Asana launched

6

- Microsoft acquired Yammer
- Slack launched

Number of Transactions

5

- Whatsapp Business launched

4

3

2

1

0
2010

2011

2012

2013

2014

2015

31

2016

2017

2018

2019

Figure 28: Number of Infrastructure Management Transactions Per Year
9

- Microsoft announced generally availability of Azure ExpressRoute
- Google announced Kubernetes
- AWS launched Lambda

- Microsoft Azure released
- Google Cloud Storage launched

8

- IBM acquired Red Hat

Number of Transactions

7

- AWS CloudFormation launched
- Apple announced iCloud
- AWS Direct Connect introduced

6

- Average number of SaaS apps used
per organization doubled from 2015

5
4
3
2
1
0
2010

2011

2012

2013

2014

2015

32

2016

2017

2018

2019

Figure 29: Number of System Transactions Per Year
9

- Microsoft announced Kinect for Xbox 360
- Google announced its plans for a self-driving
car, what would be called Waymo

8

- Google Glass announced
- OculusVR formed
- Microsoft released Surface
- Microsoft released Xbox One; Sony
released PlayStation 4

Number of Transactions

7

- Microsoft released HoloLens

6
- Google released
Chromebook

5
4
3
2
1
0
2010

2011

2012

2013

2014

2015

33

2016

2017

2018

2019

Figure 30: Number of Security Transactions Per Year
4.5
- Lockhead Martin released Cyber Kill Chain model

4

- WannaCry ransomware attack took place

- Ring launched its first video doorbell

3.5

- NIST released Framework for Improving
Critical Infrastructure Cybersecurity

Number of Transactions

3

2.5

2

1.5

1

0.5

0
2010

2011

2012

2013

2014

34

2015

2016

2017

2018

2019

Figure 31: Number of Media Technologies Transactions by Year
3

- Twitch launched; acquired by
Amazon in 2014

- Spotify reached over 100M total MAU
- Google released Chromecast

Number of Transactions

- Amazon announced Echo and
Alexa

- Apple TV+ debuted
- Netflix had over 167 million global
streaming paid memberships worldwide

2

1

0
2010

2011

2012

2013

2014

2015

35

2016

2017

2018

2019

4. Summary
The five technology platform 6(b) respondents identified 616 non-HSR reportable
transactions above $1 million, in addition to 101 Hiring Events and 91 Patent Acquisitions. The
respondents reported an additional approximate 60 transactions below $1 million and 160
financial investments. Voting Security (Control) and Asset acquisitions comprise 65% of all of
the above transactions. When excluding Hiring Events, Patent Acquisitions, and transactions
below $1 million, Voting Security (Control) and Asset acquisitions comprise 85% of the
transactions.
Focusing on the 616 transactions at or above $1 million (that exclude Hiring Events and
Patent Acquisitions), the study led to a number of observations:


The total number of such transactions per calendar year across the five respondents
ranged from 43 at its lowest per calendar year (in 2012) to 79 at its highest (in 2014), and
remained relatively higher in 2015-2019 (ranging from 63 to 74 transactions) than in
2010-2013 (ranging from 43 to 63 transactions).



The number of such transactions in each transaction size range fluctuated but generally
trended up over the 2010-2019 time period (ranges were between $1 Million and $5
Million, with 23.54% of the transactions; between $5 Million and $10 Million, with
15.10% of the transactions; between $10 Million and $25 Million, with 26.30% of the
transactions; between $25 Million and $50 Million, with 13.64% of the transactions;
between $50 Million and $HSR Size of Transaction Threshold, with 6.17% of the
transactions; and greater than the HSR Size of Transaction Threshold, with 15.26% of the
transactions).



Of these transactions, 65% were between $1 million and $25 million.



Asset and Control transactions (including Voting Security Control and Non-Corporate
Interest Control transactions) were the most common in each transaction range. For
transactions exceeding $5 million, the majority were Control transactions. Moreover,
higher-value transactions were more likely to be Control acquisitions.



The majority of transactions in each transaction range were for domestic firms, with
roughly two thirds of the entities acquired in each transaction range being domestic.



In 36% of the transactions, the acquirer assumed some amount of debt or liabilities. Such
debts and liabilities, when added to the purchase price of the target, would have tipped
the purchase amount of three transactions above the HSR Size of Transaction threshold.
That is, three more transactions would have been added to the 94 transactions already
above the HSR Size of Transaction threshold.



More than 79% of transactions also used deferred or contingent compensation to founders
and key employees, with relatively small variation across the five respondents. Higher
value transactions were more likely to use deferred or contingent compensation. Of the
36

transactions reported, nine additional transactions would have exceeded the HSR Size of
Transaction threshold (i.e., in addition to the 94 transactions already above the HSR Size
of Transaction threshold) at the time of their consummation when adding the deferred or
contingent compensation to their purchase price.


More than 75% of transactions included non-compete clauses for founders and key
employees of the acquired entities, with relatively small variation in the percentage of
transactions that had non-compete clauses across the five respondents. Higher value
transactions were more likely to use non-compete clauses.



In more than 50% of the transactions for which the number of the target entity’s full-time
non-sales employees that were hired by the acquirer was reported by respondents (68% of
the transactions), the number of employees was between 1 and 10. In addition, the
employee counts are positively correlated with the size of the transaction.



At least 39.3% of the transactions where the target’s age was available (86.9% of the
transactions) were for firms that, as of the time of the consummation of the transaction,
were less than five years old. The distribution of the acquired firms’ ages in each calendar
year appeared to marginally, though not considerably, change over 2010-2019. The
largest such variation was for the number of acquisitions of firms that were less than five
years old, which mostly decreased after 2014.



Most of the transactions that were classified into technology categories were concentrated
in the categories of Mobility (mobile devices and device-based software and content,
which comprised more than 10% of the acquired firms), Application Software (front-end
applications such as CRM, ERP, SCM, BI, commerce and vertical business software,
which comprised more than 9% of the acquired firms), and Internet Content &
Commerce (internet destination and internet-enabled services, which comprised more
than 6% of the acquired firms). In the Mobility and Application Software categories, the
number of transactions peaked in 2015; in the Internet Content & Commerce category,
the number of transactions peaked in 2011.

This report analyzed certain aspects of the set of non-HSR reportable transactions by five
of the largest technology firms during the period of 2010-2019. Notably, the report adds to the
existing body of empirical literature on the subject by analyzing a number of trends and patterns
identified in the data. The information intends to inform ongoing discussions among
policymakers, academics, and other stakeholders.

37

September 2021

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A7dff7da2968c4df3. Public record. Not legal advice.