Licensing and Releases: How Corporate Giants Are Quietly Circumventing FDA and Antitrust Scrutiny

Image Credit: Kathrine Jølle Wathne

In the ever-evolving landscape of American corporate maneuvering, a new form of acquisition is emerging—one that skirts the traditional regulatory scrutiny imposed by federal watchdogs, particularly the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC). This latest innovation in corporate strategy is referred to as “licensing and releases,” a legal and financial workaround that is technically not classified as a full acquisition, yet functionally achieves nearly all of the same ends. It’s a method being quietly deployed by some of the largest players in tech and biotech—namely Meta, Google, and other data-driven giants—to bypass the enormous hurdles and delays that come with outright acquisitions.

To understand the gravity and implications of this new acquisition style, one must first appreciate the intensity of regulatory oversight that governs mergers and acquisitions in the United States. When a company like Meta or Google attempts to acquire another firm—especially one in the medical, biotech, or artificial intelligence space—it must go through a rigorous FDA evaluation (when health-related data or technologies are involved), alongside comprehensive antitrust analysis from the FTC and the Department of Justice. These procedures can take years, and in many instances, the deals are either blocked or altered beyond recognition by the time they clear regulatory hurdles.

Enter “licensing and releases.” This approach, on paper, eschews the traditional framework of an acquisition. Instead of acquiring a company outright—buying its shares, assuming its liabilities, and transferring ownership—these mega-corporations buy a significant but minority equity stake in the target firm, usually just under the 50% mark. This allows them to claim that they do not control the company, thus avoiding the classification of a full acquisition.

In reality, however, what is happening is far more encompassing. Along with the minority stake, the larger company enters into an ironclad licensing agreement. This license gives them full rights to the company’s technology, data pipelines, customer relationships, internal workflows, algorithms, and sometimes even the workforce itself. The structure is meticulously designed to ensure that while the parent company does not own the target entity, it still enjoys full economic and operational benefit from it.

Perhaps the most illustrative recent example is Meta’s quietly executed acquisition of a 49% stake in Scale.ai, a leading data-labeling and AI infrastructure company. The deal, which insiders report to be valued at over $14 billion, was framed as a “strategic investment and licensing partnership.” However, the terms of the agreement included sweeping access to Scale.ai’s proprietary datasets, tools, software, machine learning models, and cloud-based annotation systems. Meta now uses these tools to fuel its own AI ambitions, including its LLaMA models and multimodal architecture across Instagram, Facebook, and Oculus VR platforms.

Though technically not a full acquisition, the functional control Meta now exerts over Scale.ai is virtually indistinguishable from actual ownership. According to sources close to the deal, the agreement includes non-compete clauses that prevent the founders and original executives of Scale.ai from starting a similar venture for a number of years. It also includes stipulations that all future upgrades and innovations made within Scale.ai must be made available to Meta under preferred licensing terms, effectively placing Meta in the driver’s seat for the company’s technological roadmap.

This trend is particularly attractive to companies operating in sectors that brush up against FDA regulations. As AI increasingly becomes intertwined with medical diagnostics, genetic research, and health monitoring, any acquisition that affects these technologies often triggers FDA scrutiny. The agency must then review whether the merger will affect patient safety, data integrity, or market fairness in the health tech ecosystem. For giants like Google—whose parent company Alphabet owns health-centric subsidiaries like Verily and Calico—such regulatory friction can delay or derail strategic growth. By pursuing licensing and releases instead of traditional buyouts, these companies can gain access to cutting-edge health tech tools without assuming the liability or regulatory burden that full ownership entails.

The same holds true in the field of antitrust enforcement. Over the past decade, American regulators have taken a more aggressive posture in policing mega-mergers. The FTC, under current leadership, has initiated lawsuits and investigations into large-scale acquisitions in both tech and pharma, citing concerns about monopolistic practices and reduced market competition. By maintaining a minority stake and allowing the original company to nominally remain independent, firms like Meta and Google can argue that they are not consolidating the market but rather “partnering” in innovation. This argument—though thinly veiled—can hold legal water under current frameworks, especially when there is no clear-cut evidence of operational control.

While the approach is technically legal, it is not without controversy. Critics argue that this method undermines the very spirit of regulatory oversight. By exploiting a legal grey zone, large corporations can effectively consolidate power, dominate niche markets, and absorb innovative startups without facing any of the traditional checks and balances. What’s more, this kind of arrangement can limit the startup’s future potential. Even though it remains nominally independent, its freedom to pivot, innovate independently, or partner with competing firms becomes severely restricted. In essence, these companies become ghost subsidiaries—legally independent, but financially and operationally tethered to their parent partners.

What makes these licensing deals even more sophisticated is the way they are structured financially. Unlike typical licensing arrangements, which involve royalties or periodic payments, many of these new deals are front-loaded with massive lump sums disguised as “strategic capital infusions” or “prepaid license fees.” These payments serve the same purpose as a purchase price in an acquisition, except they are categorized differently to stay off the radar of antitrust investigators. Further complicating the regulatory landscape is the use of shell entities, offshore holding companies, and third-party investors to further diffuse the appearance of control or influence.

While the Meta-Scale.ai example has garnered the most attention, similar arrangements are reportedly in the works across a variety of industries. Google is said to be exploring a similar structure with several biotech firms specializing in personalized medicine and genomic diagnostics. Microsoft has also quietly inked licensing partnerships with small-scale cybersecurity firms, giving it near-exclusive access to new encryption protocols without triggering antitrust alarms. Even Amazon has pursued this route in its push to dominate logistics and healthcare, having secured licensing rights to software platforms used in smart hospitals and autonomous delivery.

From a legal standpoint, these arrangements are difficult to challenge. Since the parent company does not cross the ownership threshold that triggers antitrust or FDA review, regulators have limited tools to intervene. Attempts to pierce the veil and prove de facto control require time-consuming investigations and insider testimony, which are hard to obtain unless a whistleblower emerges. Furthermore, the contracts are often written with such precise legal language that they provide plausible deniability to the firms involved.

The implications of this trend are profound. If this model continues to proliferate, it could redefine the boundaries of corporate acquisition and fundamentally alter how innovation is absorbed by market giants. Startups may find themselves courted not with buyout offers, but with licensing agreements that offer big money up front, but little long-term independence. And regulators may be forced to rethink the very definitions of “control” and “ownership” in a digital, data-driven age where access is everything and paper ownership is no longer the only pathway to domination.

Already, discussions are reportedly underway inside the FTC and FDA to create new frameworks that address this kind of strategic acquisition. One idea being floated is the introduction of “functional acquisition” laws—regulations that focus not solely on share ownership but on economic entanglement, operational dependency, and exclusive access to proprietary technology. But such changes are likely years away and would require significant political will to implement.

Until then, licensing and releases represent one of the most ingenious and, some might argue, subversive corporate innovations of our time. It is the perfect synthesis of legal acumen, financial muscle, and strategic patience—a loophole that enables the biggest companies on Earth to continue expanding their reach without triggering the alarms meant to protect market fairness and innovation. Whether regulators will catch up in time remains an open question. But for now, the floodgates are open, and the deals are already being written.