Elon Musk’s Twitter Purchase Faces US FTC Antitrust Review

The United States Federal Trade Commission (FTC) is reviewing the $44 billion acquisition of Elon Musk by Twitter Inc.

An anonymous source familiar with the deal told Bloomberg that the independent government agency is expected to issue a decision on its review by next month. Then, the FTC will decide whether to conduct an in-depth review of the transaction or not.

US FTC crosshairs

Under US merger law, billionaire Elon Musk is required to notify the FTC and the Department of Justice of the transaction about the deal.

It then needs to wait at least 30 days in advance to allow for an investigation into potential antitrust concerns. That is, the agency checks if there are any indications that the business may harm free competition.

During this period, the FTC may request additional information about the acquisition. Thus, it issues what is known as a second request, which would further delay the closing of the deal.

Antitrust experts told Bloomberg, however, that the agency is unlikely to find any evidence that Musk’s purchase of Twitter is illegal under antitrust law.

It is worth noting that the FTC has been investigating, since early April, Musk’s initial purchase of a stake of about 9% in Twitter. More precisely, it is investigating whether the entrepreneur complied with a requirement of the antitrust report when he acquired the shares.

Critics say buying should be stopped

Although experts think the deal does not violate antitrust law, some disagree.

Antitrust activist group Open Markets Institute, for example, said the purchase agreement should be stopped. After all, the purchase of Twitter would give Musk, an already powerful man, “direct control over one of the world’s most important platforms for public communications and debate.”

According to the group, the deal “poses immediate and direct threats to American democracy and freedom of expression.”

Furthermore, they argued that Musk’s ownership of the Starlink satellite internet service already gives him control over a key communications platform and that his purchase of Twitter would be a dangerous concentration of power.

Either way, if the FTC finds Musk violated the law, he could face a fine of up to $46,517 a day for failing to comply with federal guidelines, according to the Daily Mail.

Binance Helps Fund Musk’s Twitter Offer

News of the investigation comes at roughly the same time as information that Musk has raised more than $7 billion from 18 investors committed to backing the Twitter purchase. They can support “the cause”.

Binance, for example, has committed $500,000,000. Meanwhile, Fidelity will contribute around US$300 million and Sequoia will contribute US$800 million. Andreessen Horowitz will finance US$ 400 million.

But the biggest contribution to the business comes from Larry Ellison’s Lawrence J. Ellison Revocable Trust. The Tesla investor will also allocate US$ 1 billion to “support the cause”.