Preventing 'trick acquisitions' targeting K-NVIDIA talent... "Promoting Merger Notifications"

Preventing 'trick acquisitions' targeting K-NVIDIA talent... "Promoting Merger Notifications"

Revisions in the first half of this year, implementation within the year... Research service amid controversy over MS's 'improper acquisition'

Joo Byung-ki: "So that venture companies are not sacrificed by aggressive strategies... there will be no trade issues."

A plan to include cases of effectively 'improper acquisition' by hiring key personnel from technologically advanced artificial intelligence (AI) startups as subjects for corporate merger notification will be promoted within the year.

This is intended to respond to new types of corporate mergers to support the growth of innovative companies and create a fair competitive environment in the era of AI.

Joo Byung-ki, Chairperson of the Fair Trade Commission (FTC), met with a group of Korean reporters in Manila, Philippines, where he was visiting to attend the International Competition Network (ICN) on the 7th (local time), and said, "We plan to clearly include new types of corporate mergers that circumvent merger review, such as 'acqui-hire,' as subjects for corporate merger notification and review."

According to the FTC on the 10th, 'acqui-hire' refers to a talent-acquisition type of merger, which, unlike traditional mergers and acquisitions (M&A) involving the acquisition of a company or business unit, secures key personnel such as founders, technology, and licenses.

The government's concern is that attempts to strengthen monopoly power by avoiding corporate merger review through the absorption of key personnel from startups, mainly by global big tech companies, have frequently appeared recently.

In 2024, Microsoft (MS) hired co-founders and key employees of AI startup 'Inflection AI' and purchased AI model licenses, and at the time, there was controversy over whether such actions constituted an improper acquisition that circumvented corporate merger notification and review.

Accordingly, major competition authorities such as the European Union (EU), the United Kingdom, and Japan conducted market surveys on new types of corporate mergers through the absorption of key personnel appearing in the AI industry.

The FTC also conducted a research service last year in line with this trend and plans to promote institutional improvements based on it.

Chairperson Joo said, "We are trying to strengthen corporate merger review to prevent our venture companies from being sacrificed by the aggressive and hostile corporate merger strategies of large companies."

He emphasized preemptive measures, stating, "For example, K-NVIDIA companies can be acquired by semiconductor giants, and pharmaceutical ventures can also be sufficiently acquired by existing pharmaceutical companies."

However, the FTC does not intend to consider all simple job changes or ordinary scouting as subjects for notification. The policy is to look into cases where the hiring of key personnel has an effect equivalent to 'business transfer,' where the business itself is transferred.

The FTC aims to prepare an amendment within the first half of this year and implement it within the year.

Specifically, the FTC plans to revise its public notice 'Guidelines for Corporate Merger Notification' to clearly define cases where the systematic transfer of key personnel has the effect of a business transfer as subjects for corporate merger notification and review.

Under domestic fair trade laws, corporate merger types are classified into five categories: ▲ stock acquisition ▲ interlocking directorates ▲ merger ▲ business transfer ▲ participation in company establishment.

Chairperson Joo said, "This form can also be seen as a type of killer acquisition," and added, "We expect that once the revision is completed, we will be able to effectively respond to attempts to strengthen monopoly power through the absorption of personnel in the AI sector."

Regarding the possibility of trade friction arising as global big tech companies' talent recruitment falls under new regulatory scrutiny, he replied, "Since the EU, the UK, and Japan are also considering introducing this, I don't think it will escalate into a trade issue."