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Lina Khan, the former chair of the Federal Trade Commission, told a roomful of founders and investors that poaching talent in billion-dollar deals still amounts to an acquisition by another name — and it could someday meet the same scrutiny as blockbuster mergers.
“If these acqui-hires are being done in a way that is ultimately having a bad effect on competition, that is something that enforcers should be able to look at, and they should be looking at,” she said during a talk at Primary Venture Partners’ summit in New York City.
Big Tech isn’t buying startups at the rate it used to. Lately, it’s strip-mining them.
Meta hired Scale AI’s Alexandr Wang after investing $14.3 billion in the data labeling startup. Google picked off Windsurf’s chief executive and top researchers for a $2.4 billion licensing fee. Microsoft gutted Inflection, Amazon raided Adept, and so on. The deals appear to share a common goal: close quickly and dodge watchdogs.
Primary Venture Partners
Khan made clear in New York that regulators aren’t fooled. “If it is an effort to get around competition laws,” she said, “it’s definitely something they should be able to reach.”
In May, the Justice Department said it was investigating whether Google violated antitrust laws through a pseudo-acquisition of Character.AI, a popular chatbot company. One year earlier, the FTC opened a probe into a Microsoft deal to hire Inflection’s cofounder and almost all of its employees.
Such deals could also gain more scrutiny in Europe. In an interview with Reuters last month, the outgoing head of the European Commission’s antitrust unit said it had urged member states to flag deals to hire key people, not acquire the company, to the group for review.
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