Tendencias y Estudios / Digitalización

Big Tech Acquisitions: Competition and Innovation Effects & EU Merger Control

In parallel to these large operations ‘big tech’ companies also buy many successful or promising start-ups on a very large scale. For example, for the year 2017 alone, Alphabet, Amazon, Apple, Facebook and Microsoft spent a total of $31.6bn on acquisitions of start-ups.

This paper looks at the characteristics of the digital economy and outlines the main issues raised by the effects of big tech acquisitions on innovation and competition. It reviews the main economic theories which analyse the effects of big tech acquisition, and discusses the implications of those theories on EU merger control, in particular regarding the notification threshold, the theories of harm and the standard and burden of proof.