ZWeR 2024, 287
A Decade of Enforcement: Traditional Theories of Harm and the Challenges Posed by Digital Mergers
Many commentators have expressed concerns about the current state of merger enforcement in the digital sector. Some point to the fact that numerous acquisitions by large digital firms have not undergone sufficient scrutiny, while others propose fundamentally new theories of harm relating to data, privacy or so-called ecosystem effects. The debate remains active, with recent cases like Amazon/iRobot and Booking/eTraveli adding fuel to the fire.
In this article, we examine merger decisions related to the digital sector published by Europe’s leading authorities over the last decade. Through our review of 55 cases, involving acquisitions by GAFAM and other firms, we find that these authorities have not rushed to expand their analytical toolkit, generally relying on traditional tools and well-established theories of harm. However, we also observe that these tools have been applied more broadly or in novel ways, especially in recent years.
Contents
- I. Introduction
- II. Overview of current research
- III. Case selection and sample
- IV. Categorisation of theories of harm advanced in our sample
- 1. Loss of actual competition
- 2. Loss of potential competition
- 3. Foreclosure in adjacent markets
- 3.1 Input foreclosure
- 3.2 Customer foreclosure
- 3.3 Conglomerate foreclosure
- 4. Creating, protecting or strengthening a strong position in a core market through means other than eliminating (potential) competition between the merging firms
- 4.1 Data-related theories of harm
- 4.2 Integration of complementary functionalities and foreclosure
- 4.3 Ecosystem theories of harm
- V. Efficiencies
- VI. Conclusion
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- *)Partner at RBB Economics, Düsseldorf/Germany
- **
- **)Partner at RBB Economics, Brussels/BelgiumThe views, thoughts and opinions expressed in this article are those of the authors and should not be attributed to other employees of RBB Economics or RBB Economics as whole. While RBB Economics has advised on several of the cases discussed in this article, the authors themselves have not, and their analysis is based solely on information available in the public domain. The authors would like to thank Mark Brisske and Alina Gruschka for their significant contribution, as well as Victoria Hähnel, Jo Magnus Ryen Aalerud and Yu Han Wang for their help in reviewing the cases and literature.
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