Key Points
- EU regulators are now targeting “acqui-hires,” where Big Tech hires entire startup teams.
- They see this as a loophole to avoid the normal rules for company mergers.
- The EU is encouraging national agencies to flag these deals for review.
- Regulators argue that hiring key staff is the same as buying a company’s main assets.
EU regulators are setting their sights on a popular Big Tech tactic used to absorb smaller rivals: the “acqui-hire.” This practice, where a large company hires the entire senior team of a startup instead of officially buying the company, may soon face the same tough scrutiny as major mergers.
Olivier Guersent, the departing head of the EU’s competition unit, warned that regulators see these deals as a clever way for tech giants to avoid merger rules. He stated that hiring a startup’s key staff is essentially the same as acquiring its most valuable assets.
To combat this, the European Commission is actively encouraging national regulators in countries like Ireland, Denmark, and Sweden to use their powers to flag these deals for a full EU review, even if they fall below the usual financial thresholds.
This new focus comes after several high-profile examples. Last year, Microsoft paid $650 million to hire most of the staff from AI startup Inflection, and Google poached key employees from chatbot company Character.AI. More recently, Google hired staff from AI code startup Windsurf, and Amazon brought on the founders of AI firm Adept.
Guersent, who was a key figure behind the EU’s landmark Digital Markets Act (DMA) designed to curb Big Tech’s power, said the fight is ongoing. He acknowledged that while the DMA has made a difference where decades of antitrust action failed, it hasn’t solved everything.
He contrasted Apple’s compliance with the new rules against Meta’s resistance, noting that reining in the power of tech giants is a long-term battle. This move against acqui-hires is the next step in that fight.
