Jan 16 (Reuters) – The U.S. Federal Trade Commission is scrutinizing big tech firms that hire employees of a startup instead of buying the companies outright, Bloomberg News reported on Friday, citing the agency’s Chairman Andrew Ferguson.
The growing practice, in which big tech firms pay for startups’ technology and talent without buying the company, is seen as a way to sidestep antitrust review.
“We are beginning to examine these acqui-hires to make sure they are not an attempt to get around” the agency’s merger review process, Ferguson said in an interview with Bloomberg Television.
Last month, Nvidia agreed to license chip technology from startup Groq and hire away its CEO Jonathan Ross, a veteran of Alphabet’s Google.
In similar recent deals, Microsoft’s top AI executive came through a $650 million deal with a startup that was billed as a licensing fee, and Meta spent $15 billion to hire Scale AI’s CEO without acquiring the firm.
Amazon also hired away founders from Adept AI. The deals have faced scrutiny by regulators, though none has yet been unwound.
In the interview, Ferguson blamed the Biden administration’s aggressive antitrust enforcement for prompting companies to ramp up this practice.
U.S. President Donald Trump fired the agency’s two Democratic commissioners last year, sparking a U.S. Supreme Court case that could tighten the president’s control over government agencies designed by Congress to be somewhat insulated from politics.
(Reporting by Puyaan Singh in Bengaluru; Editing by Leroy Leo)
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