‘Killer Acquisitions’ and Innovation in the Digital Markets: In Search of the Possible Novel Theory of Harm in EU Merger Control
(2023) JAEM03 20221Department of Law
Faculty of Law
- Abstract
- Innovation has taken a spotlight within the ongoing discourse on antitrust as stakeholders grapple with its controversial but pivotal role in shaping the current landscape of competition and market dynamics characterised by the swift advancement of technological development. The European Commission has increasingly referred to innovation as a significant parameter of competition, with firms now competing through unprecedented business models. The increasing dynamism of markets has underscored the limitations of the existing regulatory framework in assessing potentially anti-competitive mergers. The rise of large technology firms has posed unseen challenges for merger control, particularly with respect to acquisitions of small and... (More)
- Innovation has taken a spotlight within the ongoing discourse on antitrust as stakeholders grapple with its controversial but pivotal role in shaping the current landscape of competition and market dynamics characterised by the swift advancement of technological development. The European Commission has increasingly referred to innovation as a significant parameter of competition, with firms now competing through unprecedented business models. The increasing dynamism of markets has underscored the limitations of the existing regulatory framework in assessing potentially anti-competitive mergers. The rise of large technology firms has posed unseen challenges for merger control, particularly with respect to acquisitions of small and innovative start-ups, which prior to mothballing, may have had the potential to compete with entrenched market players (a phenomenon commonly referred to as ’killer acquisitions’). However, acquisitions of these nascent players often fall below the monetary thresholds that trigger regulatory scrutiny. Conversely, the limited number of reported instances indicates a deficiency in identifying competition problems during the substantive appraisal. This trend has had a corresponding impact on the priorities of antitrust regulators, leading to a heightened emphasis on safeguarding innovation and competition within the EU merger control framework.
This shift reflects the recognition by antitrust enforcers that competition is not limited to traditional price-based competition but can also occur through non-price factors such as innovation. This approach has been justified because innovation can create new markets, expand consumer choice and drive long-term economic growth. However, the focus on innovation has also raised concerns that antitrust enforcement may hinder rather than foster innovation, particularly where it results in the blocking of mergers or the imposition of restrictive conditions that limit firms' ability to innovate. EU competition policy and the application of competition law are clearly in flux, making it difficult to strike a balance between anti-competitive and pro-competitive mergers. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9119406
- author
- Immonen, Henri LU
- supervisor
-
- Anna Tzanaki LU
- organization
- course
- JAEM03 20221
- year
- 2023
- type
- H2 - Master's Degree (Two Years)
- subject
- language
- English
- id
- 9119406
- date added to LUP
- 2023-06-27 10:38:13
- date last changed
- 2024-03-07 12:57:32
@misc{9119406,
abstract = {{Innovation has taken a spotlight within the ongoing discourse on antitrust as stakeholders grapple with its controversial but pivotal role in shaping the current landscape of competition and market dynamics characterised by the swift advancement of technological development. The European Commission has increasingly referred to innovation as a significant parameter of competition, with firms now competing through unprecedented business models. The increasing dynamism of markets has underscored the limitations of the existing regulatory framework in assessing potentially anti-competitive mergers. The rise of large technology firms has posed unseen challenges for merger control, particularly with respect to acquisitions of small and innovative start-ups, which prior to mothballing, may have had the potential to compete with entrenched market players (a phenomenon commonly referred to as ’killer acquisitions’). However, acquisitions of these nascent players often fall below the monetary thresholds that trigger regulatory scrutiny. Conversely, the limited number of reported instances indicates a deficiency in identifying competition problems during the substantive appraisal. This trend has had a corresponding impact on the priorities of antitrust regulators, leading to a heightened emphasis on safeguarding innovation and competition within the EU merger control framework.
This shift reflects the recognition by antitrust enforcers that competition is not limited to traditional price-based competition but can also occur through non-price factors such as innovation. This approach has been justified because innovation can create new markets, expand consumer choice and drive long-term economic growth. However, the focus on innovation has also raised concerns that antitrust enforcement may hinder rather than foster innovation, particularly where it results in the blocking of mergers or the imposition of restrictive conditions that limit firms' ability to innovate. EU competition policy and the application of competition law are clearly in flux, making it difficult to strike a balance between anti-competitive and pro-competitive mergers.}},
author = {{Immonen, Henri}},
language = {{eng}},
note = {{Student Paper}},
title = {{‘Killer Acquisitions’ and Innovation in the Digital Markets: In Search of the Possible Novel Theory of Harm in EU Merger Control}},
year = {{2023}},
}