Digital Markets Guide – Global Competition Review

Between 2019 and 2022, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) (collectively, the US Antitrust Agencies) have been active in issuing Second Requests and filing challenges to block mergers and acquisitions involving digital services and technology companies. This Chapter addresses recent technology and digital sector merger cases and highlights key trends emerging from enforcement in those sectors.

US merger cases with a digital aspect between 2019 and 2022

Amazon (2022)

In the span of a month, Amazon announced it would acquire One Medical for US$3.5 billion and Roomba for US$1.65 billion. One Medical is a tech-focused, primary-care healthcare company, and its acquisition, combined with Amazon’s ‘existing online pharmacy and nascent telehealth and house call services’, could play a role in raising Amazon’s profile in the health industry and in the segment for virtual healthcare offerings. Roomba is the manufacturer of the iRobot vacuums, and Amazon announced its plans to acquire Roomba after introducing its own similar offering, the Amazon Astro, a camera-equipped robot device powered by Amazon’s Alexa smart home system.

The FTC is closely reviewing the proposed acquisitions. Amazon is facing data-related scrutiny in both its acquisitions, similar to the FTC’s concerns over user data in Microsoft’s acquisition of Activision Blizzard.

On 2 September 2022, it was reported that the FTC has launched an investigation into Amazon’s acquisition of iRobot, with one of its concerns being ‘whether the data generated about a consumer’s home by iRobot’s Roomba vacuum will give [Amazon] an unfair advantage over a wide variety of other retailers’.

On the same day, One Medical’s parent company disclosed in a US Securities and Exchange Commission filing that One Medical and Amazon each received requests for additional information and documentary material (Second Requests) in connection with Amazon’s acquisition of One Medical. ‘[T]he FTC is asking questions about the data Amazon would have access to, querying insurance companies and others about how One Medical’s patient data would potentially give it an advantage over competitors and customers,’ especially since Amazon has received criticism over its previous use of data collection and acquisitions to grow its position in the e-commerce segment. The FTC’s scrutiny will not necessarily result in a lawsuit to block both deals, though. US Antitrust Agencies might not have a strong case against Amazon’s acquisitions of either company and might elect not to challenge the deals. Both acquisitions could be a test for Chair Khan’s enforcement priorities, and the FTC’s ability to execute on its stated policy positions.

In March 2022, Amazon closed its US$8.5 billion acquisition of MGM. As a result of the transaction, Amazon’s Prime Video, its online streaming service, will acquire the rights to more than 4,000 movies and 17,000 TV shows. Amazon announced the acquisition in May 2021.

On 15 March 2022, the EU granted Amazon unconditional approval, stating that the transaction would not raise competition concerns in Europe. The FTC did not challenge the transaction by the mid-March 2022 deadline, and Amazon moved to close the transaction; however, the FTC has the ability to challenge acquisitions post-consummation, and recent reports suggest that the FTC may still be reviewing the transaction and could challenge the acquisition.

Meta/Within (2022)

On 27 July 2022, the FTC sued in US district court to enjoin Meta Platforms’ proposed acquisition of Within. According to the complaint, Meta is a provider of virtual reality (VR) devices and apps in the United States. Previously, Meta had acquired several VR apps, including fitness app Beat Saber and Oculus VR, Inc., a VR headset manufacturer and owner of a distribution platform for VR software apps.

Within is a software company that develops apps for VR devices, such as the fitness app Supernatural. The FTC alleged that Meta’s proposed acquisition of Within would ‘combine the makers of two of the most significant VR fitness apps’, thereby significantly reducing competition, or tending to create a monopoly, in two relevant product markets: the VR dedicated fitness app market (with dedicated fitness apps being apps that deliberately provide a structured physical workout), and the VR fitness app market (comprising both VR ‘dedicated fitness apps’ and ‘incidental fitness apps’, which are apps whose primary focus is not fitness but that allow users to ‘accidentally’ get a workout because of the physically active nature of the apps). The FTC also contended that Meta’s proposed acquisition would enhance Meta’s market power in the already-concentrated VR fitness app market and was part of its effort to ‘exploit the network-effects dynamic in VR’ to grow its position in the overall VR ‘metaverse’.

Moreover, the complaint alleges that since Meta is a potential entrant in the VR-dedicated fitness app market and has the resources to build its own dedicated fitness app, its acquisition of Within would eliminate existing and potential competition, and dampen future innovation, in the VR dedicated fitness app market.

On 5 August 2022, the district court issued a temporary restraining order, and Meta and Within agreed not to close the proposed acquisition until 1 January 2023, or until the court rules on the FTC’s injunctive request, whichever comes first. As at September 2022, the court has not ruled on the FTC’s request for a preliminary injunction. This is the first time the FTC has pre-emptively challenged an acquisition by Meta.

Broadcom/VMware (2022)

In May 2022, Broadcom Inc., one of the largest semiconductor chipmakers in the world, announced plans to acquire VMware, Inc., a cloud software company, for US$61 billion. After Broadcom withdrew its US$117 billion acquisition of Qualcomm in 2018, Broadcom shifted towards acquiring software and cloud services companies. Broadcom now hopes to combine VMware’s multi-cloud offerings and Broadcom’s software portfolio. VMware’s offerings include data centre management, digital infrastructure tools and multi-cloud services. If consummated, Broadcom’s acquisition would be ‘among the largest in the history of the technology industry, second only to Microsoft’s proposed US$75 billion purchase of games maker Activision Blizzard.’

However, according to public filings by both companies, the FTC issued Second Requests for information on 11 July 2022. As at September 2022, the FTC has not commented on its investigation. The EU has indicated that it will be launching a potentially lengthy antitrust investigation into the deal after receiving concerns from some opponents, including existing VMware clients.

Regulators will likely be concerned with, and seek assurances from Broadcom over, tying or bundling arrangements with customers (e.g., exclusivity or loyalty agreements), retaliation against customers for doing business with Broadcom competitors and price increases. Broadcom will likely argue that the proposed acquisition is not a merger between two competitors and that it will not lead to price increases, negatively affect innovation or undermine price or quality competition.

UnitedHealth Group’s Optum and Change Healthcare (2022)

On 24 February 2022, the DOJ challenged in US district court UnitedHealth Group’s US$13 billion proposed acquisition of Change Healthcare. UnitedHealth is the largest healthcare company by revenue and owner of the largest health insurance company in the United States. Change is the leading source of key technologies to UnitedHealth’s health insurance rivals. It also has access to sensitive data about UnitedHealth’s rivals in the relevant product market for the sale of commercial health insurance to national accounts and large group employers – markets that the complaint contends satisfy the ‘hypothetical monopolist’ test.

The DOJ alleged that UnitedHealth’s acquisition of Change would give UnitedHealth access to this data and control over Change’s technologies, thereforw allowing UnitedHealth to co-opt its rival insurers’ competitive strategies and raise their costs and deny or delay their access to products, services and improvements supplied by Change. It also alleged that UnitedHealth and Change are the two largest, competing vendors in the relevant product market of first-pass claims editing solutions in the United States, with a combined market share of at least 75 per cent; therefore, according to the complaint, the proposed acquisition would lead to a presumptively anticompetitive market concentration and give UnitedHealth a vertically integrated monopoly.

On 19 September 2022, the district court ruled in UnitedHealth’s favour and approved its acquisition of Change, but ordered the companies to divest the only Change business with ‘direct competitive overlap’ with UnitedHealth – its ClaimsXten unit that provides first-pass claims-editing technology – to private equity firm TPG Capital, as proposed by the companies.

The court’s ruling delivers a ‘blow to enforcer efforts to contest so-called vertical tie-ups connecting companies at different points of the supply chain’ and also indicates that the judge ‘was persuaded that concerns of horizontal overlap between [competitors] were completely overriden by plans to sell ClaimsXten to TPG’, contrary to the government’s general stance against divestitures and consent decrees in problematic transactions. In a statement following the court’s decision, Assistant Attorney General (AAG) Kanter said the DOJ is ‘reviewing the opinion closely to evaluate next steps.’

Microsoft/Activision Blizzard (2022)

In January 2022, Microsoft Corporation announced plans to buy Activision Blizzard, Inc. for around US$70 billion. Activision is the game developer of the popular Call of Duty, World of Warcraft, Candy Crush and Guitar Hero franchises.

The proposed acquisition has come under the scrutiny of several regulators, including the FTC and the UK Competition and Markets Authority (CMA). Regulators will likely ‘focus on the combination of [Activision’s] gaming portfolio with Microsoft’s consoles and hardware systems’ and on whether Microsoft’s ownership of Activision could harm rival gaming companies, such as Sony, by limiting their access to Activision’s biggest games.

The FTC is also examining the deal ‘with an eye to the combined companies’ access to consumer data, the game developer labour market and the deal’s impact on those workers who have accused Activision of discrimination and a hostile workplace.’ In a 9 June 2022 letter to Senator Elizabeth Warren, FTC Chair Lina Khan confirmed that the agency is investigating the proposed deal, with a focus on its potential impacts on Activision workers. Given the allegations of sexual harassment and discrimination lobbed against Activision, as well as the recent unionisation of some of its video game testers, the FTC may focus on whether any non-compete clauses or non-disclosure agreements also violate antitrust or consumer protection laws.

Microsoft has attempted to ‘assuage’ these potential regulatory concerns by recently stating that it ‘would stop using non-competes or confidentiality clauses to bar workers from talking about discrimination or harassment as part of a settlement or separation deal’. It also announced a labour neutrality agreement with regard to employees that are interested in joining a union, which would apply to Activision after the acquisition. As at September 2022, the FTC’s investigation is ongoing.

Salesforce/Slack (2021)

On 16 February 2021, the DOJ issued Second Requests to Salesforce and Slack in connection with their US$27.7 billion merger. The merger would make the Slack collaboration tool the interface for Salesforce Customer 360 to compete with Microsoft’s similar product.

After a five-month investigation, the DOJ announced that it had completed its review and that it would not challenge the acquisition. The DOJ likely had concerns about Salesforce competitors’ future ability to use Slack’s messaging service or Salesforce illegally obtaining competitor information through Slack. It may have also had concerns that Salesforce could cross-sell Slack by requiring that any user of its software also use Slack’s messaging service, which could have stymied entry for new workplace messaging competitors. The parties closed the transaction on 21 July 2021.

The DOJ’s challenge to this transaction could further suggest that the agencies will be interested in non-horizontal mergers in the tech space, and that it could use Second Requests proactively to better understand the general nature of competition in those sectors.

Google/Fitbit (2020/2021)

In 2020, the European Commission and the DOJ investigated Google’s US$2.1 billion proposed acquisition of Fitbit. Although the European Commission cleared the transaction in December 2020, the DOJ continued to scrutinise the proposed merger. On 14 January 2021, Google announced that it closed the transaction even though the DOJ continued to investigate the transaction.

There has been limited information about the DOJ’s investigation into the Google/Fitbit transaction, but it is possible that the merger investigation may have been tied to the DOJ’s ongoing lawsuit against Google’s allegedly anticompetitive conduct. That the DOJ has not made any announcements about this transaction could also portend that it may have had difficulty defining a relevant product market or articulating theories of harm in a non-horizontal merger.

Visa/Plaid (2020)

On 5 November 2020, the DOJ challenged Visa’s proposed US$5.3 billion acquisition of Plaid, alleging that Visa is a monopolist in online debit transactions and that the acquisition represented Visa’s attempt to acquire a nascent, innovative competitor. In its complaint, the DOJ described the two-sided nature of online debit platforms: they facilitate online transaction between merchants on one side and consumers on the other. Although the DOJ recognised that Plaid was not a direct competitor, it argued that the relevant market for online debit transactions included both online debit services (e.g., those that Visa traditionally offers) and pay-by-bank debit services (e.g., those that Plaid offers). On 12 January 2021, the parties terminated the agreement.

Intuit/Credit Karma (2020)

On 25 November 2020, the DOJ challenged and required a settlement in the proposed US$7.1 billion merger of Intuit and Credit Karma. Credit Karma operates a personal finance platform that offers free services such as credit monitoring, financial management and digital do-it-yourself (DDIY) tax preparation services. Intuit offers tax preparation, accounting, payroll and finance solutions to individuals and small businesses.

The complaint alleged that Intuit and Credit Karma are direct competitors in the relevant product market of the development, provision, operation and support of DDIY tax preparation products. Under the terms of settlement, filed simultaneously with the complaint on 25 November 2020, the parties agreed to divest Credit Karma’s tax business to Square, Inc. for US$50 million. With the divestiture, the transaction between Intuit and Credit Karma closed on 3 December 2020.

The DOJ’s challenge and subsequent settlement with the parties highlights how the US Antitrust Agencies might allow divestitures to other growing, digital platforms, such as Square, to support some of their nascent product offerings, such as Cash App, which was starting to develop a tax preparation offering.

CoStar Group/RentPath Holdings (2020)

On 30 November 2020, the FTC filed a suit to block CoStar Group, Inc.’s US$587.5 million acquisition of RentPath Holdings. CoStar operates listing sites such as and, whereas RentPath operates listing sites such as and

The FTC alleged that the acquisition would significantly increase concentration in the already highly concentrated markets for internet listing services advertising for large apartment complexes, which the FTC defined as the relevant product market. The FTC argued that CoStar and RentPath were head-to-head competitors and that the five-to-four merger would bring together the top-two internet listing services for large apartment complexes. A month after the FTC filed its complaint, on 29 December 2020, CoStar and RentPath terminated their merger agreement.

The FTC’s suit in this transaction could suggest two trends:

  • the US Antitrust Agencies may turn their attention to acquisitions of ‘proptech companies’ (digital companies emerging in the property industry); and
  • the agencies will not shy away from reviewing technology mergers valued at less than US$1 billion.

Sabre/Farelogix (2019–2020)

On 20 August 2019, the DOJ challenged in US district court Sabre’s US$360 million proposed acquisition of Farelogix, alleging that Sabre, a dominant provider of airline booking services, was attempting to eliminate a ‘disruptive’ competitor. The US district court disagreed, reasoning that the DOJ failed to define adequately a relevant market and that therefore, Sabre did not compete with Farelogix because Sabre is a two-sided platform that interacts with airlines and travel agencies, whereas Farelogix interacts with airlines and is not a two-sided platform. After the UK CMA challenged the transaction, the parties agreed to terminate their merger agreement in April 2020.

The US district court’s decision shows that after Ohio v. American Express, the US Antitrust Agencies will face difficulties in challenging mergers of digital platforms where the proposed relevant product market does not include both the buy and sell sides of the platform. Even if both platforms were two-sided, however, the anticompetitive effects of a merger between two-sided platforms would need to ‘reverberate . . . to such an extent as to make the two-sided . . . platform market, overall, less competitive.’

US Antitrust Agencies challenge acquisitions of nascent competitors and attempt to tackle conglomerate mergers

From 2019 to 2021, the US Antitrust Agencies focused increasingly on acquisitions of nascent competitors. As seen in the government’s complaints in Visa/Plaid, Intuit/Credit Karma and Sabre/Farelogix, the agencies raised these concerns in digital industries because, they argue, these markets are more likely to gain increased market share by being a favoured platform through enhanced network effects and economies of scale. The US Antitrust Agencies have also identified creative ways to challenge mergers, such as in Visa/Plaid, by bringing allegations under Section 2 of the Sherman Act, which prohibits the wilful acquisition or maintenance of monopoly power, monopolisation or attempted monopolisation.

Between 2021 and 2022, the US Antitrust Agencies have turned their enforcement attention to conglomerate acquisitions (Microsoft/Activision and Broadcom/VMware) and acquisitions raising concerns about how an acquirer could misuse an acquiring entity’s data to harm competitors (United Healthcare/Change). The investigations the US Antitrust Agencies have initiated in the past year and the recent suit to block Facebook’s acquisition of Within show the challenges the US Antitrust Agencies face with defining the relevant market under the existing Merger Guidelines.

Perhaps more notably, the volume of enforcement against technology companies is not what many speculated it would be under FTC Chair Khan and AAG Kanter. If the US Antitrust Agencies publish new Merger Guidelines in 2023, technology companies could continue to see increased scrutiny and continued investigations and challenges that are broader and more creative in scope and reach.

Remedies will remain difficult

Recent DOJ and FTC enforcement actions suggest that the US Antitrust Agencies may continue to demand structural remedies with upfront buyers and divestitures of entire business units; however, the US Antitrust Agencies have expressed a strong preference for litigating a case instead of pursuing remedies.

AAG Kanter has noted that divestitures may be an option only in exceptional circumstances, but also acknowledged that divestitures could be appropriate where ‘business units are sufficiently discrete and complete that disentangling them from the parent company in a non-dynamic market is a straightforward exercise, where a divestiture has a high degree of success.’ His statements and his use of ‘non-dynamic’ suggests that remedies in technology mergers or acquisitions may face more intense scrutiny than in previous administrations.

Merging parties, especially in technology and digital platforms, should expect that the US Antitrust Agencies will not support many proposed divestitures and should consider alternatives in advance of structuring a transaction, such as a fix-it-first solution. As seen during the past year, in the face of challenges by US authorities, several merging parties involved in digital or technology mergers (e.g., Visa/Plaid and CoStar/RentPath) abandoned their transactions.

Looking ahead to 2023

From 2019 to the first half of 2022, the US Antitrust Agencies were active in technology and digital market merger enforcement. They continued to focus on both horizontal and vertical mergers across the technology and digital sectors, and they continued to focus on transactions involving innovative competitors.

One dominant principle in the US government’s effort to promote competition in the technology sector is ensuring internet platforms do not ‘push[] out would-be rivals’ and ‘scoop[] up intimate personal information that they can use for their own advantage.’ The White House has also called for ‘clear limits on the ability to collect, use, transfer and maintain . . . personal data, including limits on targeted advertising’ and discriminatory algorithms, to address the alleged ‘harms caused or magnified’ by technology platforms.

Looking forward, with the White House Competition Council, FTC Chair Kahn and AAG Kanter at the helm of antitrust policy in the United States, this merger enforcement trend will likely continue. In addition, the White House and Congress continue to turn their attention to competition and data access and privacy in the technology sector. Technology companies should continue to monitor the changing legislative landscape, which could impose new rules on acquisitions by large technology companies, and the release of new Merger Guidelines, which are slated to target new and creative ways to enforce antitrust laws in digital markets.

Technology companies and digital platforms should anticipate more scrutiny in the form of voluntary access letters, requests for additional information and documentary material, longer periods to negotiate divestitures and other remedies (if even given the opportunity) and potential reviews of past acquisitions. Technology companies should also expect more cohesion in antitrust enforcement across the federal government, including more coordination across agencies (in relation to issues such as labour) and increased coordination with foreign competition agencies on these issues.



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