Abstract
From Facebook acquiring WhatsAPP and Instagram to Microsoft buying out Linkedin, Skype and Github or Google swallowing Motorola Mobility, DoubleClick or Nest Labs, mergers and acquisitions in the digital economy have been controversial. Some of the concerns have been fairly traditional. While the development of the digital economy does not either call for a revolution in how we conduct merger control, it is likely to require some significant changes in competition guidelines and will require close coordination between competition authorities and other regulatory agencies. The main characteristics of digital technologies are algorithms, data, bridging of distance and speed. These characteristics have a number of important consequences, which are explored in this study. This underlines the need for forward looking merger review and the possibility of using access/interoperability remedies. The combination of algorithms and data has allowed unprecedented targeting of advertising to online consumers as well as a tailoring of the offers (including prices) received by each individual. These mergers pose a serious challenge to our usual economic analysis of horizontal effects as well as to our traditional approach to market definition. However, while the role of data in digital competition is undeniable, we currently lack the information required to derive broad principles as to how data should be considered in merger review. The study examines these issues, drawing on economic theory and existing caselaw in the EU, US and BRICS. It concludes with several recommendations for competition authorities, touching upon an array of issues, such as product and geographic market definition, theories of harm, efficiencies, potential competition, counterfactuals and standard of proof.
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