Significant Impediment to Industry Innovation: A Novel Theory of Harm in EU Merger Control?

Petit, Nicolas

doi:10.2139/ssrn.2911597

Cited by 8 publications

(4 citation statements)

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“…In Dow/Dupont and Bayer/Monsanto without contravening EU Merger Regulation 169 or departing from the Horizontal Merger Guidelines ('HMG'), the Commission managed to go beyond a price/output analysis and developed a robust innovation-based theory of harm. 170 Even though some criticise the Commission as engaging in a 'quantum leap', 171 its analysis is anchored on the HMG's explicit statement that 'increased market power' is defined not only as the ability to profitably increase prices, but also as the ability to profitably diminish innovation or affect negatively other parameters of competition. 172 Based on such a brief statement and its previous practice, the Commission considered that the merging of two close competitors with significant overlaps in a number of innovation spaces in a structurally oligopolistic, innovation-driven industry could lead to a significant impediment of effective innovation competition.…”

Section: B Responsive Enforcementmentioning

confidence: 99%

EU Competition Law as Responsive Law

Makris¹

2021

Camb. Yearb. Eur. Legal Stud.

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This article proposes two broad ways to conceptualise EU competition law. EU competition law could be viewed as ‘autonomous law’ (‘AL’), namely as a closed normative system a technocratic tool consisting in a set of rules that prohibit undue restraints of trade. Or, EU competition law could be viewed as ‘responsive law’ (‘RL’), namely as a relatively open normative system and an interpretive practice that oscillates between openness and integrity. The responsiveness approach offers a compelling conceptualisation as it explains certain endogenous features of EU competition law: its fuzzy mandate, conceptually elastic vocabulary, and use of rules and standards. In addition, the responsiveness approach can clarify the role economics plays in EU competition law. It views economics as an ‘ideological science’, which, even though it cannot insulate this legal field from value disagreements and make it ‘autonomous’, it can provide a source for positive and normative interpretive statements. On this basis the responsiveness approach maintains that EU competition law is by design open—ie conceptually elastic and factually sensitive—and that its openness can enhance, but also undermine its integrity—ie its capacity to realise its objective in a rule of law compatible manner. These conflicts between openness and integrity are the cause of EU competition law's relative indeterminacy. To deal with the problem of indeterminacy, the RL approach proposes a tripartite legal-institutional modus operandi consisting in constructive interpretation, responsive enforcement, and catalytic adjudication. Hence, considering EU competition law as a form of responsive law has three major implications: first, it offers a new way for understanding how this legal field works and changes; second, it suggests a strategy for dealing with EU competition law's indeterminacy, and third it proposes a new framing for the discursive practices of EU competition law's epistemic community.

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Section: B Responsive Enforcementmentioning

confidence: 99%

EU Competition Law as Responsive Law

Makris¹

2021

Camb. Yearb. Eur. Legal Stud.

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“…These nevertheless are limited by continued focus on the connection between the conditions for competitors and prices or consumer choice. Even the novel theory of harm rooted in consumer rights to privacy (Abate, 2018) and the emerging theory of harm to innovation (Petit, 2017) appear concerned about the behaviour of competitors and choice for individual consumers. These theories are not used to determine which firms might be included in a competition investigation.…”

Section: A Theory Of Harm To Citizen Wellbeingmentioning

confidence: 99%

Platform power in the video advertising ecosystem

Micova¹,

Jacques²

2020

IPR

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Platform power is a societal concern on many levels. Thus, we argue that addressing it with the common market competition approach is limited. The research we present aims to develop and test an alternative approach to conceptualising and assessing platform power. We propose a framework that operationalises the concept of the integrated platform ecosystem by bounding it with theories of harm to citizen wellbeing. Applying it, instead of defining a market, we use a specific, novel theory of harm to define the audiovisual advertising ecosystem. Our investigation into the dynamics of this ecosystem and conditions shaping them incorporated elite interviews with representatives of firms involved, document analysis and an examination of legal frameworks in a sample of four European jurisdictions. The evidence we present points to an inherent bias in the opacity of trading and to systemic advantage in relationship building, as well as potential power imbalances at 'nodes' where data is used for targeting, planning, and metrics. We discuss the policy implications of these findings and suggest specific questions for regulators to be asking. Issue 4 1. The European Commission's Directorate General for Competition has fined both Facebook and Google following recent investigations (see European Commission 2017a, 2017b & 2019) and in autumn 2019 US State Attorney Generals formally launched antitrust investigations into Facebook and Google's parent company Alphabet (see Paxton, 2019; James, 2019), followed shortly after by the US Department of Justice.

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“…In a string of recent merger decisions, culminating in the Dow/DuPont case, 1 the European Commission has profoundly revisited its traditional analysis of innovation and, ultimately, introduced what some authors have labeled "a novel theory of harm in EU merger policy." 2 According to this theory, the Commission does not look at harm to innovation on a specific product market in which parties are developing similar pipeline products but adopts a general assessment of harm to innovation, unrelated to a specific product market and without considering potential anticompetitive effects on this basis.…”

Section: Introductionmentioning

confidence: 99%

“…This article is structured as follows: (1) In the first section, we set the stage by highlighting the factors that have led innovation to become the center piece of the Commission's merger intervention. (2) In Section II, we briefly describe the traditional analytical framework the Commission has employed to assess innovation in merger control and provide a short overview of some illustrative cases in point. (3) We then describe the Commission's "new" approach in the Medtronic/Covidien, 4 Novartis/Glaxosmithkline Oncology Business [GSK], 5 and Dow/DuPont 6 cases.…”

Section: Introductionmentioning

confidence: 99%

EU Merger Control and Harm to Innovation—A Long Walk to Freedom (from the Chains of Causation)

Todino¹,

Walle²,

Stoican³

2018

The Antitrust Bulletin

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In a string of recent merger decisions, culminating in the Dow/DuPont case, the European Commission has profoundly revisited its traditional analysis of innovation and, ultimately, introduced what some authors have labeled “a novel theory of harm in EU merger policy.” According to this theory, the Commission does not look at harm to innovation on a specific product market in which parties are developing similar pipeline products, but adopts a general assessment of harm to innovation, unrelated to a specific product market and without considering potential anticompetitive effects on this basis. The purpose of this article is to show that over the last few years, the European Commission has been progressively departing from a “traditional” theory of harm in its assessment of mergers affecting innovation. In particular, we argue that the novel theory of harm developed in Dow/DuPont, based on a generic prejudice to innovation, is the landing place of a long journey through which the Commission has progressively altered the analytical framework applicable to traditional cases affecting pipeline products/potential competitors. And while this stance may be inspired by a legitimate policy goal, it brings the Commission on a collision route with the principles of causation and symmetry governing European Union merger control analysis.

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Significant Impediment to Industry Innovation: A Novel Theory of Harm in EU Merger Control?

Cited by 8 publications

References 8 publications

EU Competition Law as Responsive Law

EU Competition Law as Responsive Law

Platform power in the video advertising ecosystem

EU Merger Control and Harm to Innovation—A Long Walk to Freedom (from the Chains of Causation)

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