EU to Spotlight Acquihires in Big Tech Regulation, Antitrust Official Says

EU regulators could begin regulating big tech acquihires, outgoing antitrust unit head at the European Commission’s Antitrust Unit, has said. According to Reuters, acquihires involve the hiring of founders and senior managers in tech startups as opposed to acquiring the companies fully.

Acquihires Under EU Watch

EU antitrust regulators view acquihires as attempts by major tech giants to evade merger laws. Speaking about acquihire deals scrutiny earlier this week, outgoing Director General at the European Commission’s Antitrust Unit Olivier Guersent said the regulator wanted national agencies that hold call-in power to act on the growing practice.

Countries like Hungary, Denmark, Sweden, Slovenia, Italy, Ireland, Latvia, and Lithuania hold such power, which allows them to refer mergers that do not meet EU thresholds to the Commission.

“It is important to preserve effective competition. We need to be patient and have enough member states that have call-in provisions and use them. But we are working on it. Within the European Competition Network (ECN), we are actively encouraging it to do so,” Guersent said.

The ECN is a forum for cooperation for national regulators and the European Commission.

Acquihires as a Form of Merger

According to Guersent, acquihires may be viewed as mergers because staff forms an important part of a startup’s assets. The EU antitrust official, who championed the Digital Markets Act that aims to curtail the power of tech giants, said the Act has been generating positive results.

“It made a difference in fields in which decades of antitrust enforcement have not managed to make a difference. Did it change everything as much as we would have liked? Probably not. So that’s why success is always relative,” he said.

Acquihire deals have become common in the tech industry. Tech giants have been recruiting key staff from startups, licensing their technologies, and marketing their products. They do this while allowing them to maintain their private entity status. Some tech giants that have opted for acquihires include Microsoft, Amazon, Google and Meta.

Last year, Microsoft paid AI startup Inflection $650 million in a deal that allowed the Windows maker to use Inflection models. The deal also saw Microsoft hire a majority of employees in the AI startup, including its co-founders. Amazon also hired the co-founders of Adept, an AI startup in June 2024.
Google also hired employees from Character.AI, a chatbot startup. In May this year, the Department of Justice in the US, began an antitrust investigation into the Google-Character.AI partnership deal. The purpose of the investigation is to determine whether it was structured to avoid formal regulatory approval.

US Officials are concerned that big tech companies like Google may be using partnerships to reduce competition in the fast-growing AI industry. Google also hired staff from AI code generation company, Windsurf in 2024.

The Biggest Acquihire Yet

The biggest acquihire that the tech industry has witnessed so far has been conducted by social media giant Meta. The company’s $14.3 billion investment in Scale AI and the consequent hiring of the company’s CEO, Alexandr Wang is a classic example of an acquihire.

The US social media giant has been assembling a team of highly qualified AI experts to lead the newly established Meta Superintelligence Lab. Wang will lead the unit as the Chief AI Officer.
“This is fundamentally a massive acquihire play disguised as a strategic investment. While Meta gets Scale’s data infrastructure, the real prize is Wang joining Meta to lead their superintelligence lab. At the $14.3 billion price tag, this might be the most expensive individual talent acquisition in tech history,” Lead AI Consultant at Northwest AI Consulting Wyatt Mayham said.

Meta also hired former Former CEO of GitHub, Nat Friedman to co-lead its new AI unit.