Global competition authorities call for stronger policing of mergers

UK, Australian and German agencies highlighted the dangers of anticompetitive mergers, particularly in the tech sector

The UK, Australian and German competition authorities have released a joint statement highlighting the importance of rigorous and effective merger enforcement, with an emphasis on the tech market in particular.

“Competition can only be maintained by ensuring anticompetitive mergers do not happen. This is even more so in a fast-developing digital world impacted by the Coronavirus (COVID-19) pandemic,” the statement reads.

The authorities believe there’s a need for strong merger enforcement from competition agencies globally to maintain and promote competition for the benefit of consumers.

The statement underlines that market power can be easily established and entrenched in dynamic and highly concentrated markets like technology, “where a seemingly small transaction of a startup or mid-tier business by a dominant player can cause a competitive market to tip in an anticompetitive direction”.

In the full report, it points to the technology sector in particular: “Technology markets can also be examples of highly concentrated markets with features such as high barriers to entry due to network effects. This can result in high market concentration, such that market power is easily created or entrenched, and is likely long lived.”

“Companies have a clear incentive to merge with or acquire their competitors to increase their market power and raise prices. This is why effective merger control is so important, and why some mergers must be blocked by competition authorities," said ACCC Chair Rod Sims.

Related Resource

IT Pro 20/20: Meet the companies leaving the office for good

The 15th issue of IT Pro 20/20 looks at the nature of operating a business in 2021

IT Pro 20/20: Leaving the office for goodDOWNLOAD NOW

The Australian Competition and Consumer Commission (ACCC) recently won a case against Google which argued that the company had misled consumers about personal location data collected through Android devices between January 2017 and December 2018. Following this win in the Australian courts this month, the ACCC is now seeking declarations, pecuniary penalties, publication orders and compliance orders which will be determined at a later date.

This comes after the CMA was instructed by the government this week to intervene in the sale of Arm to Nvidia. The CMA is currently preparing a report with advice on the jurisdictional and competition issues regarding the takeover.

The UK also launched the Digital Markets Unit (DMU) earlier this month to regulate anti-competitive activities of big tech companies and crack down on unfair practices that restrict consumer choice. It sits within the CMA and is the first regulator of its kind charged with specifically examining the role big tech firms occupy in business and society.

Featured Resources

B2B under quarantine

Key B2C e-commerce features B2B need to adopt to survive

Download now

The top three IT pains of the new reality and how to solve them

Driving more resiliency with unified operations and service management

Download now

The five essentials from your endpoint security partner

Empower your MSP business to operate efficiently

Download now

How fashion retailers are redesigning their digital future

Fashion retail guide

Download now

Recommended

Tesla Megapack goes up in flames at Australian battery site
Hardware

Tesla Megapack goes up in flames at Australian battery site

30 Jul 2021
Microsoft mulls investment in Indian hotel startup Oyo
Cloud

Microsoft mulls investment in Indian hotel startup Oyo

30 Jul 2021
The IT Pro Podcast: Bringing cricket into the digital age
Data & insights

The IT Pro Podcast: Bringing cricket into the digital age

30 Jul 2021
Podcast transcript: Bringing cricket into the digital age
Data & insights

Podcast transcript: Bringing cricket into the digital age

30 Jul 2021

Most Popular

The benefits of workload optimisation
Sponsored

The benefits of workload optimisation

16 Jul 2021
Samsung Galaxy S21 5G review: A rose-tinted experience
Mobile Phones

Samsung Galaxy S21 5G review: A rose-tinted experience

14 Jul 2021
RMIT to be first Australian university to implement AWS supercomputing facility
high-performance computing (HPC)

RMIT to be first Australian university to implement AWS supercomputing facility

28 Jul 2021