Big Tech Acquisitions and Merger Control: Challenges Posed by Digital Platforms and Ecosystems

Challenges Posed by Digital Platforms and Ecosystems

Nils Stock

Although legal analysis of (merger-related) firm dominance in ‘Big Tech’ has emphasised the so-called GAFAM – Google, Amazon, Facebook, Apple, and Microsoft – this important book stresses the necessity for a much broader view. Numerous large tech platforms continue to seek dominance in and across various market segments by acquiring small start-up companies with high competitive potential but yet little or no turnover, thereby running the risk of escaping antitrust scrutiny. This phenomenon is now often referred to as ‘killer acquisitions’ and it raises problems with regard to both the jurisdictional and the substantive aspects of merger control, which this book addresses comprehensively.

Focusing on legislative initiatives and enforcement practice, especially in the European Union and the United Kingdom, and through an in-depth analysis of the most prominent decisions concerning Big Tech acquisitions, the author spells out the nature of such relevant legal issues and strategies as the following:

• the economic principles of platform competition and the particularities of digital ‘ecosystems’, including their implications for merger control;

• an extensive comparison of different jurisdictional rules and notification requirements beyond standard turnover thresholds;

• how Big Tech acquisitions can be subjected to scrutiny in the European Union via referrals under Article 22 of the European Union Merger Regulation (EUMR), potentially in combination with national ‘call-in’ tools and/or Article 14 of the Digital Markets Act (DMA), and how the latter compares to the reporting requirement under the Digital Markets, Competition and Consumers (DMCC) Act in the United Kingdom;

• market definition and market power assessments, including but not limited to social media and advertising markets;

• how both traditional and novel theories of harm can be applied in the context of digital platforms and ecosystems;

• application of theories of harm relating to ‘killer acquisitions’ and ‘reverse killer acquisitions’;

• the development of an ‘ecosystem’ theory of harm; and

• artificial intelligence as the new frontier.

Policy proposals and the academic legal literature are taken into account, with due regard to economic considerations as well.

With competition authorities and legislators worldwide grappling to find an appropriate response to the expansion and consolidation of dominance in various digital markets, it appears necessary to contemplate alternatives to the current turnover-based notification thresholds and to rethink the substantive assessment of Big Tech acquisitions. This book, with its thorough guidance on the characteristics, challenges, and treatment of digital platforms and ecosystems in the context of merger control – and its clear exposition of applicable theories of harm – will greatly assist practitioners, competition authorities and policymakers to successfully navigate through the challenging tasks of establishing jurisdiction, defining relevant markets, and assessing market power and competitive harm.