US: Antitrust Chief says tech dealmaking spawns ‘Great Efficiencies’

Is a green light flashing for dealmaking in tech land, allowing large firms to easily snatch up smaller ones? There’s a verbal assent in place, according to the The Financial Times, that US Justice Department’s Antitrust Chief Makan Delrahim sees value from such transactions.

Delrahim said in an interview with FT that “great efficiencies” could be wrung from such mergers and acquisitions of that size and scale. The end result has been that consumers have been the ultimate beneficiaries of such activity. As examples, he cited Google’s US$1.7 billon deal to buy YouTube 12 years ago, and that same tech giant’s buyout of Waze for a little under US$1 billion, five years ago.

As quoted by FT, Delrahim stated, “You wonder would YouTube be as useful and as [much of] a competing force to music or in video had it not been enhanced and improved through the tech resources that Google had? … I think there’s [sic] great efficiencies that could occur from a lot of these. You can’t, you know, in retrospect try to second guess that.”

Delrahim made his comments in context against what might be a shifting regulatory landscape in the US and abroad, as lawmakers and regulatory agencies here and in Europe are looking at deals with more intensity. If antitrust laws do not meet the needs of a brave new digital world, and where business models have changed, they may need an overhaul. As an example, noted the FT, services are free for customers and are paid for by advertisers.

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