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The past year has been eventful for merger control, with 2024 further highlighting the evolution of UK and EU merger control, and the development of more novel theories of harm associated with the loss of potential competition and ecosystem theories of harm.
In the latest expert chapter for ICLG on merger control, Mat Hughes and Ben Forbes review some of the key highlights of 2024.
In summary:
- There have been further prohibitions involving potential competition/dynamic innovation concerns (e.g. Adobe/Figma).
- Large technology companies continue their pursuit of potentially “killer” acquisitions, with Artificial Intelligence (AI) mergers now starting to appear more frequently. This has brought increased scrutiny from competition authorities, particularly in cases involving large digital platforms and their expansion into adjacent markets.
- Horizontal concerns around enhancing an ecosystem and raising barriers to entry for rivals has emerged as a theory of harm in what would normally be a classic conglomerate merger, as evidenced by the European Commission’s prohibition of Booking/Etraveli – and notwithstanding that this merger was cleared by the CMA at Phase 1.
- Our review of the 36 UK/EC parallel cases since January 2021 show that, although the majority of decisions are aligned (61%), in eight mergers (22%) there was disagreement about the competitive assessment. Those differences can be a function of the different facts facing each authority (i.e. taking account of the idiosyncrasies of the individual geographical markets); however, it can also be a result of a different weighting on the evidence, or approaches (read scepticism) to different types of remedies (with the CMA’s approach to behavioural remedies – e.g. in Microsoft/Activision – being noticeably more stringent than the European Commission’s).
- This changing landscape of merger control means practitioners need to remain alert to the interplay of network effects, potential competition, and market entry barriers in their assessments of competitive effects, and for parallel cases, how different authorities may view the specific facts.
Since finalising the chapter, the position on remedies has evolved again following the CMA’s decision of 5 December to clear the Vodafone/Three merger subject to commitments relating to the delivery of the parties’ joint network plan over the next eight years and capping the prices of selected mobile tariffs and data plans for three years (covering the early years of the network plan). The CMA also announced a review of its approach to merger remedies in early 2025.
