Taking aim at innovation-crushing mergers: a killer instinct unleashed?

Eben, M. and Reader, D. (2023) Taking aim at innovation-crushing mergers: a killer instinct unleashed? Yearbook of European Law, (doi: 10.1093/yel/yead013) (Early Online Publication)

Abstract

The European Union (EU) has assigned competition policy an important role as part of an extensive new agenda to stimulate innovation, including by fostering the growth of small and medium-sized enterprises (SMEs). The ability of EU merger control to be receptive and responsive to innovation harms has therefore come under scrutiny, with some observers doubting its capacity to address innovation-crushing ‘killer acquisitions’ of innovative SMEs. This article reflects on several recent developments that have shaped the EU’s response to these doubts. Substantively, the more central role afforded to innovation considerations in the European Commission’s recent enforcement practice may well demonstrate its willingness to engage with innovation theories of harm in mainstream merger control going forward, although questions remain about the standards and methodology it can adopt under the EU Merger Regulation (EUMR). Jurisdictionally, the recalibrated approach to the Article 22 EUMR referral mechanism—assisted, in certain circumstances, by the new pre-merger information obligation for digital gatekeepers under Article 14 DMA—is capable of bringing an almost boundless range of cases before the Commission. The Towercast judgment casts the net further still, by confirming the potential for below-threshold mergers to face ex post reviews at the national level under the Article 102 TFEU abuse of dominance prohibition. The effect of these developments is that the Commission and national competition authorities may now be better equipped to unleash a killer instinct when faced with innovation concerns arising from killer acquisitions. However, an unwelcome pendulum swing towards over-enforcement risks untold harm to legal certainty, merger activity, and innovation itself.

• Item Type: Articles
• Keywords: Merger control, innovation harm, innovation spaces, killer acquisitions, Article 22 EUMR, Article 14 DMA, Article 102 TFEU, Illumina/GRAIL saga, Towercast judgment.
• Status: Early Online Publication
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Reader, Dr David and Eben, Dr Magali
• Authors: Eben, M., and Reader, D.
• College/School: College of Social Sciences > School of Law
• Journal Name: Yearbook of European Law
• Publisher: Oxford University Press
• ISSN: 0263-3264
• ISSN (Online): 2045-0044
• Published Online: 28 November 2023
• Copyright Holders: Copyright © 2023 The Author(s)
• First Published: First published in Yearbook of European Law 2023
• Publisher Policy: Reproduced under a Creative Commons license