Solving Structural Competition Problems Require Changes in EU Merger Regulation

Abstract

EU competition law does not effectively address or make it possible to resolve some of the structural competition problems identified in the markets. The Commission plans to design and launch a new competition tool to ensure fair and undistorted competition, benefit consumers, and increase innovation.

Economic research suggests that the market dominance of large platform companies may shift to traditional product markets through exploiting consumer data. Firms increasingly utilize algorithms, and also the non-dominant companies may use them for anti-competitive practices.

The scope of a new competition tool should limit neither to dominant-based enforceability nor to sectors identified as being prone to structural competition problems. Under current EU legislation, it is not possible to intervene in acquisitions where global technology giants prevent small companies from becoming market challengers. It is necessary to amend EU merger control legislation to address the acquisitions of technology giants, potentially reducing future competition, even when the acquired companies’ turnover is relatively low. In the assessment of competitive impacts of acquisitions, it is essential to evaluate whether the acquiree’s innovation can challenge the buyer in its market in the future.

Publication info

Research group
Growth, international trade and competition
Series
ETLA Muistio - ETLA Brief 89
Date
23.06.2020
Keywords
Competition, Competition policy, Algorithms, Data economy, Acquisitions
ISSN
2323-2463
JEL
G34, L1, L41
Pages
7
Language
Finnish