Loss Of Potential Competition, Ecosystems, And AI - A New Frontier For EU And UK Merger Control

1 Introduction

The last year has been eventful for merger control, with 2024 further highlighting the interventionist nature of merger control in both the UK and EU. This is part of a wider trend among the Organisation for Economic Co-operation and Development ("OECD") countries, with a 2024 OECD paper on competition trends noting that in 2022, "there was a significant increase in the merger intervention rate – the proportion of transactions in which competition authorities intervened, either by imposing a remedy or by prohibiting a transaction".¹ This underscores the importance of merging parties and their advisors proactively managing the risks posed by the UK and EU merger regimes (as discussed in last year's chapter).²

Notably, the last year saw further prohibitions involving potential competition/dynamic innovation concerns (e.g. Adobe/Figma – which we consider below), which remains a topic of interest for competition authorities globally. Large technology companies also continue their pursuit of potentially "killer" acquisitions, with Artificial Intelligence ("AI") mergers now starting to appear more frequently in the UK Competition and Markets Authority's ("CMA") case register. More competition authorities are also following the CMA's lead and revising their merger guidelines, with the latest US horizontal merger guidelines further emphasising the risks associated with a loss of potential competition. Australia is likely to follow suit in revising its merger guidelines.

We also observe the emergence of ecosystem-based theories of harm, evidenced by the European Commission's ("EC") prohibition of Booking/Etraveli. In this case, both the CMA and EC focused less on the traditional theory of foreclosure in a merger of complementary products, instead focusing on ecosystem effects leading to horizontal concerns and raising barriers to entry for other providers of accommodation online travel agent services (i.e. in Booking's core market).

Lastly, we reviewed 36 CMA/EC that were subject to parallel review since 2021 to identify points of divergence, including the Booking/Etraveli merger, where the CMA cleared the merger in Phase 1 and the EC prohibited the same merger at Phase 2.

This chapter is organised as follows:

1. Section 2: Developments in how the EC and CMA are considering mergers that lead to a loss of potential and/ or dynamic competition between the parties.
2. Section 3: A review of several recent CMA cases involving loss of potential competition and dynamic theories of harm: Adobe/Figma, Facebook/Giphy, and Uber/Autocab.
3. Section 4: An overview of the emerging ecosystems theory of harm and a case study on the CMA's clearance and EC's prohibition of Booking/Etraveli.
4. Section 5: Considers whether the CMA and EC are diverging on the 36 parallel cases since 2021.
5. Section 6: Draws some brief conclusions.

2 Loss of Potential/Dynamic Competition Remains a Key Theme of Blocked Mergers

The authors of this chapter have previously (in 2021) considered how the EC and UK have assessed mergers that may lead to a loss of potential and/or dynamic competition between the parties.³ Since we wrote that article, several themes are still apparent.

First, large technology companies continue to pursue potential "killer" acquisitions from the perspectives of regulators. Concerns in relation to such acquisitions are particularly prevalent in digital platform markets given the number of acquisitions they have made. Between 2015 and 2023, the largest technology companies completed the following acquisitions: Amazon (54), Apple (61), Meta (45), Alphabet/Google (87) and Microsoft (99), with 34 acquisitions between 2022 and 2023 alone.⁴ Recent acquisitions include Amazon/Twitch's acquisition of Spirit.ai,⁵ Microsoft's acquisition of Lumenisity,⁶ Apple's acquisition of AI Music,⁷ Alphabet's acquisition of Photomath,⁸ and Meta's acquisition of Presize.⁹

Many of these mergers historically flew under the radar of merger control thresholds, and the few that were assessed were approved (such as Google/Waze, Facebook/Instagram, and Microsoft/LinkedIn, with the latter being cleared subject to commitments). However, this raises questions about whether turnover based merger jurisdiction tests are fit for purpose. As an example, Google acquired Waze (navigation software) for $966 million but Waze had effectively zero turnover, which the parties tried to argue the services are free and therefore there is no economic activity.¹⁰ However, the UK Office of Fair Trading ("OFT") at the time said they had more than 25% of the turnby-turn navigational applications for mobile devices (based on number of downloads).¹¹ Likewise, when Facebook purchased Instagram, Instagram also had zero revenue despite a deal value of $300 million in cash plus 23 million Facebook shares (but, the UK share of supply test was met based on more than 25% of virtual social networking services).¹²

The EC has sought to review mergers even where one of the parties has low turnover using Article 22 of the EC Merger Regulation, mostly notably leading to the prohibition of Illumina's acquisition of Grail. However, on 3 September 2024, that decision was quashed when the European Court of Justice concluded that the EC does not have jurisdiction to review mergers referred to the EC under Article 22 where the merger does not meet the thresholds for notification under the EC Merger Regulation and does not meet the criteria for review under any national merger control rules of EU Member States. Also on 18 September 2024, the EC stated that it would not review Microsoft's acquisition of key personnel from Inflection AI after Member States withdrew their referrals after the European Court of Justice's judgment.

Second, and potentially as a result of the first point, more competition authorities (i.e. in addition to the UK) have added or expanded sections on potential competition to their guidelines. For example, in December 2023, the US Department of Justice and Federal Trade Commission released updated merger guidelines ("US Merger Guidelines").¹³ Guideline 4 in the US Merger Guidelines states that "mergers can violate the law when they eliminate a potential entrant in a concentrated market".¹⁴ Specifically, the US Merger Guidelines consider that to determine whether an acquisition eliminates a potential entrant, the Agencies examine: "(1) whether one or both of the merging firms had a reasonable probability of entering the relevant market other than through an anticompetitive merger, and (2) whether such entry offered a substantial likelihood of ultimately producing deconcentration of the market or other significant procompetitive effects."¹⁵ (This point was expressed in somewhat different terms in the previous version that indicated that the "lessening of competition associated with a merger involving a potential entrant is more likely to be substantial, the larger the market share of the incumbent, the greater is the competitive significance of the potential entrant, and the greater the competitive threat posed by this potential entrant relative to others".)¹⁶

The Australian Treasurer has also recently announced reforms to Australia's merger control rules, which are scheduled to be in force by January 2026. The Treasurer has specifically emphasised that "certain kinds of acquisitions – serial acquisitions by large firms and acquisitions that entrench the power of market leaders – are not adequately captured by our competition laws".¹⁷ The proposed reforms include: having a single mandatory suspensory merger control system; a new legal test and substantive assessment to address "entrenched" market power, including the ability to review all mergers within the previous three years (to respond to concerns of creeping/roll up acquisitions); changes to notification thresholds; penalties for contravention; a public register of determinations; and appeal rights for merging partes (on a limited merits basis).¹⁸ The Australian Competition and Consumer Commission has also recommended adopting new merger factors relating to "the loss of actual or potential competitive rivalry, and/or increased access to or control of data, technology or other significant assets", which addresses particular concerns relating to digital platform mergers.¹⁹

Third, the OECD recently published a paper on "moat building" and entrenchment strategies.²⁰ This paper suggests that firms may be employing these strategies to maintain their competitive advantage and discourage rivals from entering a market, to the detriment of consumers. However, the paper also notes the risk from overenforcement, where competition authorities are too aggressive with the enforcement of antitrust laws. This can lead to false positives, where firms are punished for lawful behaviour, which can deter innovation and investment.²¹ This is consistent with a 2021 OECD competition trends paper that noted that "an over-focus on dynamic effects creates risks for enforcement errors, and challenges for agencies in meeting requisite evidentiary burdens and standards".²²

Evaluating the loss of potential/dynamic competition presents challenges for competition authorities, as it involves appraising hypothetical future market scenarios. This requires making predictions about the likelihood and timing of potential entry, the potential entrant's capabilities versus those of other prospective entrants, and the impact of their absence and presence on the market. Relevant evidence will include internal documents, business forecasts, and valuations, as well as the characteristics of entry (i.e. is it attractive to customers/new and disruptive). Key questions also include whether the firm has the ability to enter (e.g. related products may provide the entrant with existing customer relationships that it can leverage or production/distribution synergies) and whether there have there been commercial responses of existing firms in anticipation of the rival entering. In markets characterised by innovation and investment (e.g. digital platforms, pharmaceuticals, and crop protection), authorities may also look for whether incumbents make investments and innovate to pre-empt entry and thereby protect their long-run profits. The focus of assessments is therefore incumbents' incentive to respond dynamically to threats of entry/expansion, including the extent of market contestability – i.e. the ability of entrants to win market share and affect market outcomes, which increases the threat of entry for incumbents – and the ability of firms to be able to appropriate or benefit from their investments, such as whether they can be protected by intellectual property rights.²³

Finally, a very recent development in this space has been the substantial increase in the number of transactions involving AI as large digital companies seek to develop their AI offerings. One estimate indicates that there were 98 AI company acquisitions in 2023 alone, with Apple alone making 32 acquisitions.²⁴

In April 2024, the CMA published an updated paper relating to its initial review of AI Foundation Models ("FMs") ("CMA AI Report").²⁵ This highlighted that FM capabilities have expanded significantly in the last year, with 120 new FMs released since September 2023. The CMA AI Report also highlights a distinct concentration of power among the largest tech firms mentioned above, controlling critical resources, such as compute power, data, and technical expertise. The CMA expressed concerns that their vertical integration and partnerships may hinder competition by reducing market diversity and choice, ultimately leading due to consumer harm due to price increases and reduced innovation. Further risks identified include market power in downstream markets (e.g. consumer products and search engines) limiting consumer choice and stifling competitors, and strategic partnerships between these dominant firms and FM developers, which may reinforce market power across the value chain. As at the date of finalising this chapter in early October 2024, the CMA has opened five investigations into AI mergers, with two completed and three ongoing:

1. Microsoft/OpenAI was opened on 8 December 2023 and is currently considering comments (which closed on 3 January 2024).²⁶
2. Microsoft/Mistral was found not to qualify/cleared on 17 May 2024.²⁷ This was because the CMA found that Microsoft did not acquire material influence over Mistral, primarily because: (1) Microsoft's potential equity stake in Mistral, even if converted, would be less than 1%, giving it no significant voting rights or ability to block resolution; (2) Microsoft's commitments to providing compute infrastructure did not create any dependence on it by Mistral; and (3) the agreement was non-exclusive, with Mistral also distributing models via other platforms, such as Amazon Bedrock and Snowflake.
3. Microsoft/Inflection was cleared on 4 September 2024.²⁸ In summary, the merger was cleared as the CMA concluded that the impact on competition would be limited (Inflection's chatbot was not a competitive constraint on Copilot and ChatGPT and faced challenges growing its user base), and Inflection's innovations (including its AI studio business for enterprise customers) were not deemed more attractive than other more established offerings.²⁹
4. Amazon/Anthropic was opened on 8 August 2024 but was closed in late September 2024 when the CMA concluded that the merger did not qualify, based on the turnover of Anthropic being less than £70 million, and the share of supply in the UK being less than 25%.³⁰
5. Alphabet/Anthropic was opened on 30 July 2024, with the CMA's invitation to comment closing on 13 August 2024.³¹ At the time of writing (mid-October 2024), no decision has yet been announced in relation to this merger.

It will be interesting to see how the CMA views Anthropic's partnership with Google, and Microsoft's merger with Open AI. Based on Microsoft/Inflection, the CMA appears willing to consider arguments that certain AI innovators may not pose large competitive threats in the future (and the final decision may be more revealing about the CMA's weighting of the evidence, and in particular the potential benefits from the merger). The Amazon/Anthropic partnership also suggests that some of these mergers may still be successfully flying under the UK's existing merger control turnover and share of supply thresholds (but see below), albeit some (or indeed many) such mergers may well raise no substansive issues in any event.

The EC also appears interested in the competition implications of AI technology. A competition policy brief released in September 2024 noted that while AI and virtual world technologies can bring about positive change (including innovation, new business models, and new ways of doing things), they can also give rise to competition concerns.³² In particular, AI mergers may reduce innovation, choice and quality, and may be prone to killer acquisitions, including by absorbing key employees or know-how. In addition, there are also wider concerns with exclusionary practices or other forms of foreclosure by dominant incumbents (e.g. exclusivity agreements, self-preferences, tying and bundling, refusal to supply, and predatory pricing).³³ We will be watching this space with interest in the coming months/years, particularly given that AI markets are some of the fastest-moving markets with significant potential upside for creating disruptive future competition.

Finally, ahead of the entry into force of the Digital Markets, Competition and Consumers Act 2024, on 1 August 2024 the CMA released a draft update to its guidance on jurisdiction and procedure. The proposed changes expand the CMA's jurisdiction to assess mergers under a new "hybrid test" if one of the parties has a market share of 33% in the UK or a substantial part thereof (such that no increment in market share is required), the same undertaking has UK turnover of over £350 million, and the other enterprise concerned has a UK nexus. In addition, digital firms that have been designated as having strategic market status will be required to report to the CMA mergers with a value of at least £25 million and with a UK connection. The CMA is currently collating responses to the consultation and intends to publish a final version of the guidance later in 2024.³⁴ The EC is also developing its decisional practice regarding digital and technology mergers, including the assessment of foreclosure risks resulting from conglomerate and vertical effects.³⁵ This included investigating data-related effects, in both horizontal (data combination) and vertical (data as an input) contexts.

Given the above developments, the next section considers several recent CMA decisions involving potential competition, including Adobe/Figma, which was prohibited based on dynamic competition concerns.

3 A Review of Recent Cases Involving Loss of Potential Competition

This next section reviews several recent CMA decisions involving a loss of potential competition, focusing on how the CMA has been weighing up the evidence in the round and assessing the potential for the merger to lead to future anti-competitive effects.

Adobe/Figma

The CMA's assessment of the acquisition by Adobe Inc. ("Adobe") of Figma Inc. ("Figma"), and how that merger may affect dynamic competition is an important case to illustrate how the CMA assesses how mergers may affect the parties' incentives to invest and innovate.³⁶ By way of background, the Parties are two major tech companies, both leaders in the design software space, but focussing on different products. The deal, valued at around $20 billion, was one of the largest in the software industry.³⁷ The rationale for the merger was to use Figma's product design capabilities to complement Adobe's core product line, and use Figma's web-based collaboration technology to innovate new products and solutions.³⁸

The CMA focussed its assessment on five markets: vector editing; raster editing; product design; video editing; and motion design; and found that the merger would raise concerns in the markets for vector editing, raster editing and product design. The CMA's assessment is summarised as follows.

First, the CMA considered that the transaction would reduce potential competition in vector editing and raster editing. The former refers to the digital process of creating content, such as logos, icons, band graphics, marketing materials and illustrations.³⁹ Raster editing software is used for point-based image editing and compositing (e.g. adjusting or retouching photos).⁴⁰ Adobe is a market leader in these markets, with Adobe Illustrator having a 70% share of vector editing and Adobe Photoshop holding an 80% share in raster editing. The remaining competitors are much smaller, with the next largest competitor having a share of under 10% in vector editing and under 5% in raster editing. To date, Figma had developed limited vector editing functionality and very limited raster editing functionality.⁴¹

The evidence showed that there was a material degree of customer adjacency between Figma's product and both Illustrator and Photoshop. Furthermore, as demonstrated by Figma's product development and plans, Figma had been taking steps to expand in these markets and would have been able to address various entry challenges through a combination of investment and acquisitions in the near to medium term.⁴²

Adobe's internal documents also indicated that it viewed Figma as representing a threat to its market positions, prompting Adobe to take actions to mitigate such a threat.⁴³ Further, the CMA considered competitors' market positions, product development plans and target use cases, which showed that Adobe faced limited other competitive constraints on its product development and innovation in these markets. The CMA also noted that Figma was particularly well placed to challenge Adobe in both markets (compared to other software providers).⁴⁴ On this basis, the CMA concluded that, absent the merger, Figma would represent a credible dynamic competitor to Adobe in vector editing and raster editing.

Second, the CMA considered that the transaction would reduce competition in innovation as regards "product design", namely the "process of designing a digital product, such as an app or website that involves some degree of user interaction".⁴⁵

Figma Design was the leading product design software, accounting for over 80% of the market by revenue. Adobe had a 5-10% share. Together the Parties had over 90% of the market. The remaining competitors had significantly lower shares of 0-5% each and less than 10% in aggregate.⁴⁶ Evidence showed that the Parties were close competitors, and that there were limited remaining constraints, including taking into account the product development plans of other market participants.⁴⁷ Hence, the CMA concluded that the merger would reduce competition in product design, which would result in higher prices and/or worse quality, and also reduce the Parties' incentives to innovate and develop their products.

Third, the CMA assessed the impact of the merger on video editing software, used for video assembling, and motion design software, used for creating motion graphics.⁴⁸ While Adobe was the leader in both markets, the evidence showed that there would continue to be other significant competitors, and that Figma was also not a material threat to Adobe. Hence, the CMA concluded that the merger was not likely to give rise to competition concerns in both of these markets.⁴⁹

The Parties abandoned the merger after the CMA's provisional findings. However, the Parties were facing similar pressure from the EC as the EC had also issued a statement of objections.⁵⁰ In September 2024 the EC released a policy brief, reviewing the EC's Phase 1 process and statement of objections.⁵¹ The EC also raised similar concerns about Figma's potential into Adobe's core markets of vector and raster editing tools (Illustrator and Photoshop). First, on eliminating dynamic competition, the EC noted that although Figma was not yet a direct competitor in these markets, it was a growing competitive threat. Its software was well-placed at the boundaries of Adobe's ecosystem and had the potential to expand its capabilities into vector and raster editing. The Commission evaluated whether Figma's gradual expansion would have allowed it to enter these markets more fully over time. Evidence pointed to Figma's potential to innovate and expand into new areas by improving its software or adding new functionalities.⁵² This competitive threat could pressurise Adobe to continue innovating its own products.

Second, on the effect on Adobe's innovation efforts, the EC investigated whether Figma's anticipated entry into these markets had influenced Adobe's product development strategies.⁵³ The concern was that, absent the merger, Adobe would have invested further into its tools to fend off Figma's growing influence. The merger could result in Adobe's market dominance being strengthened by eliminating Figma as a future competitor, potentially reducing innovation in these markets.

Facebook/Giphy

It is worth contrasting Adobe/Figma with a slightly older case – the acquisition of Giphy by Facebook.⁵⁴ Facebook is the largest provider of social media and messaging services in the UK, and Giphy is the leading provider of free GIFs and GIF stickers. Both companies offer their products free of charge to users/companies.

The CMA's main theory of harm related to loss of potential competition in the two-sided market for display advertising and social media services. The key questions were whether GIPHY could have competed with Facebook in display advertising in the UK, and whether the merger could remove a firm that was competing/had the potential to compete with Facebook.

One of GIPHY's key innovations was its Paid Alignment advertising proposition, which it first offered in 2017 in the US. This service aligned "their GIFs with popular search terms (so that users see them first when searching for a GIF), or to insert them into GIPHY's trending feed, in exchange for payment".⁵⁵ The CMA also noted that "[i]n the context of its acquisition of GIPHY, Facebook required GIPHY to stop all Paid Alignment activities, likely due to its interest in monetizing the same features".⁵⁶ Internal documents showed that "GIPHY hoped to develop its Paid Alignment product and expand its offering internationally, including into the UK".⁵⁷ Most advertisers were also positive about their experience of working with GIPHY.

The CMA concluded that Facebook had significant market power in the market for display advertising, which had high barriers to entry (demonstrated by limited successful entry in the market since Facebook became market leader).⁵⁸ GIPHY also had market power in the supply of searchable GIF libraries. According to the CMA, successful expansion in a multi-sided market, such as display advertising, can also be magnified by network effects – if Facebook owns and controls GIPHY, it would likely be able to reinforce its strong position.⁵⁹ The CMA therefore concluded that the merger would lead to a substantial lessening of competition ("SLC") as a result of horizontal effects, in the form of a loss of potential competition in display advertising.⁶⁰

Uber/Autocab

Next, we review the CMA's 2021 assessment of Uber/Autocab, which is an example of a technology merger involving potential competition that was cleared unconditionally at Phase 1.⁶¹ At face value, this merger also presented similar characteristics to Facebook/Giphy – it was a high-profile merger involving a two-sided platform, where strong network effects could re-enforce a dominant position. The merger was also subject to significant third-party concerns, which are a relevant source of evidence in dynamic markets.

By way of background, Uber is a global ride-hailing company that develops and operates proprietary technological applications that connect passengers with drivers. Uber is active in most major cities in the UK where it provides taxi services to UK customers. Autocab is a supplier of software to taxi companies, including Booking & dispatch technology ("BDT") enabling taxi companies to provide trips to passengers, and iGo, a taxi company referral network connecting demand for trips (i.e. consumers) with supply for trips (i.e. taxi companies).⁶²

The CMA's main theory of harm concerned horizontal unilateral effects in the current and future supply of BDT and network facilitating taxi services in the UK.⁶³ The CMA found that the parties competed indirectly, with Autocab in the supply of BDT and Uber in the supply of taxi services with Autocab's customer taxi companies, and that they both faced sufficient constraints in each market (Autocab by other BDT suppliers regarding software development, while Uber is constrained by various rival ride hailing apps such as Bolt and Ola).⁶⁴ The key question was therefore whether the Parties would compete more closely in the future as they both develop their products, and whether there would be an appreciable loss of rivalry.

Based on the evidence reviewed, the CMA found that Autocab were unlikely to enter in direct competition with Uber by significantly developing iGo, and even if iGo entered its impact was expected to be limited.⁶⁵ Therefore, the overall threat to Uber represented by Autocab would be low. This was based on three key pieces of evidence. First, iGo had not been growing sufficiently to date and there was limited evidence of it growing materially in the future.⁶⁶ Second, there was no sign in Uber's internal documents of Uber seeing Autocab as a threat and adopting strategies to respond to this. Third, the current other referral networks/ride hailing companies were expected to expand and increase their geographic availability in the future. On this basis, the CMA found no concerns, despite its views as to Uber's significant market power in the areas where it was active, the important network effects in the market and the material third party concerns.⁶⁷

The CMA also investigated vertical effects arising from foreclosure of taxi companies and aggregators using Autocab's offering. However, as BDT is only a small proportion of taxi companies' costs, the merged entity would not have the ability to harm Autocab's taxi company customers by raising their costs.⁶⁸ The CMA also considered whether the merged entity would have the ability to raise the price or reduce the quality of iGo, and foreclosing aggregators such as travel companies. However, there are several alternatives to iGo and many aggregators already connect to multiple referral networks.⁶⁹ Consequently, the CMA did not find an SLC as a result of vertical foreclosure effects.

Our takeaways from the CMA's recent assessments

These decisions highlight how the CMA assesses mergers where the parties are not direct competitors but have the potential to become rivals in the future (through either investment/innovation or expansion). The deciding factor in Uber/Autocab seemed to be the lack of direct competition between the two companies, either now or in the future, and the presence of direct rivals. The ability for Uber to leverage network effects were also not as strong as the other two mergers. Autocab's technology serves local taxi companies, and while Uber might use this to grow its business in smaller markets, it wasn't seen as dramatically increasing Uber's already dominant position. The indirect competition (Autocab enabling taxi companies to compete against Uber) was not seen as enough to substantially lessen competition in the ride-hailing space.

Regarding Adobe/Figma and Facebook/Giphy, in both cases, the network effects were viewed as being much more significant by the CMA. Adobe's acquisition of Figma would allow it to integrate Figma's collaborative design tool into its own ecosystem, thereby making it harder for any other competitor to challenge Adobe's dominance in the creative software market. Facebook's acquisition of Giphy raised concerns that Facebook would further strengthen its dominance in display advertising by controlling a widely used tool for sharing content, particularly on competing platforms like Snapchat or TikTok. Both mergers were seen as further entrenching dominant positions and increasing barriers to entry.

Footnotes

1 OECD, "Competition trends 2024", page 36. Available at: https://www.oecd.org/content/dam/oecd/en/publications/ reports/2024/03/oecd-competition-trends-2024_c6f770cb/ e69018f9-en.pdf

2 See Ben Forbes & Mat Hughes, AlixPartners UK LLP, "Trends and Developments in UK Merger Control: Buyer Beware", ICLG – Merger Control Laws and Regulations 2024.

3 See Ben Forbes, Mat Hughes, and Camelia O'Brien, AlixPartners UK LLP, "Assessing the loss of potential and dynamic competition under UK and EC merger control: prediction is difficult - especially if it's about the future", June 2021.

4 Our analysis of the acquisition Wikipedia pages for each company. See, for example: https://en.wikipedia.org/wiki/ List_of_mergers_and_acquisitions_by_Amazon

5 https://www.crunchbase.com/acquisition/ twitch-acquires-spirit-ai--e70d9982

6 https://blogs.microsoft.com/blog/2022/12/09/microsoftacquires-lumenisity-an-innovator-in-hollow-core-fiber-hcf-cable/

7 https://www.cdomagazine.tech/aiml/ai-shopping-spreeapple-leads-charge-with-32-startup-acquisitions-in2023#:~:text=Apple's%20key%20acquisitions&text=In%20 March%202023%2C%20the%20tech,technologies%20 integrated%20into%20Apple%20devices

8 https://ec.europa.eu/commission/presscorner/detail/en/ ip_23_1927

9 https://fashionunited.com/news/fashion/meta-acquires-presizebetting-on-virtual-sizing-technology/2022042647258

10 https://www.cnet.com/tech/services-and-software/ google-reveals-it-spent-966-million-in-wazeacquisition/#:~:text=%22In%20June%202013%2C%20we%20 completed,%24966%20million%2C%22%20Google%20 wrote%20in

11 OFT, Google/Waze, paragraph 9. Available at: https:// webarchive.nationalarchives.gov.uk/ukgwa/20140402132426/ http://www.oft.gov.uk/shared_oft/mergers_ea02/2013/ motorola.pdf

12 OFT, Facebook/Instagram, paragraph 5. Available at: https://assets.publishing.service.gov.uk/ media/555de2e5ed915d7ae200003b/facebook.pdf

13 https://www.ftc.gov/system/files/ftc_gov/pdf/2023_merger_ guidelines_final_12.18.2023.pdf

14 US Merger Guidelines, page 10.

15 US Merger Guidelines, page 11.

16 Horizontal Merger Guidelines (08/19/2010) (https://justice. gov), Section 5.3, page 18.

17 https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/ speeches/address-bannerman-competition-lecture-sydney

18 https://www.corrs.com.au/insights/ sweeping-reforms-to-australias-merger-control-rules-announced

19 https://www.accc.gov.au/system/files/submission-to-treasuryregarding-merger-reform.pdf (page 11). See also, https://www. corrs.com.au/insights/small-steps-and-giant-leaps-australiamoves-closer-to-implementing-far-reaching-merger-reform

20 https://one.oecd.org/document/DAF/COMP/WP3(2024)1/en/ pdf. In the paper, economic moats are defined as "structural competitive advantages that allow a firm to protect its market power and profitability from rivals on a long-term basis" (page 4).

21 https://one.oecd.org/document/DAF/COMP/WP3(2024)1/en/ pdf (page 26).

22 Global Merger Control (2021) – OECD Competition Trends, Volume II, page 27.

23 These concepts were covered in a previous article by the authors of this chapter. See "Understanding the New Frontier for Merger Control and Innovation – The European Commission's Decision in Dow/DuPont". Available at: https://www.alixpartners.com/ media/14514/ap_new_frontier_for_merger_control_feb_2018.pdf

24 https://stocklytics.com/content/apple-sets-new-record-acquires32-ai-startups-in-2023-the-highest-among-major-tech-companies/

25 https://assets.publishing.service.gov.uk/ media/661941a6c1d297c6ad1dfeed/Update_Paper__1_.pdf

26 https://www.gov.uk/cma-cases/ microsoft-slash-openai-partnership-merger-inquiry

27 https://www.gov.uk/cma-cases/ microsoft-slash-mistral-ai-partnership-merger-inquiry

28 Microsoft / Inflection, available at: https://www.gov.uk/ cma-cases/microsoft-slash-inflection-ai-inquiry

29 Microsoft / Inflection, paragraphs 22 and 25.

30 https://www.gov.uk/cma-cases/ amazon-slash-anthropic-partnership-merger-inquiry

31 https://www.gov.uk/cma-cases/alphabet-inc-google-llcslash-anthropic-merger-inquiry?utm_medium=email&utm_ campaign=govuk-notifications-topic&utm_source=de02690dede2-4e9e-8eca-cfdf48ed60f4&utm_content=immediately

32 https://competition-policy.ec.europa.eu/document/ download/c86d461f-062e-4dde-a662-15228d6ca385_ en?filename=kdak24003enn_competition_policy_brief_ generative_AI_and_virtual_worlds.pdf

33 https://competition-policy.ec.europa.eu/document/ download/c86d461f-062e-4dde-a662-15228d6ca385_ en?filename=kdak24003enn_competition_policy_brief_ generative_AI_and_virtual_worlds.pdf (page 12).

34 https://assets.publishing.service.gov.uk/ media/66ab3e3bfc8e12ac3edb08e7/Consultation_document. pdf (page 10).

35 https://op.europa.eu/en/publication-detail/-/publication/ e3e58b6d-7b68-11ed-9887-01aa75ed71a1

36 CMA, "Anticipated acquisition of Adobe Inc. of Figma, Inc. – Provisional finding report", 28 November 2023. Available at: https://assets.publishing.service.gov.uk/ media/656f3c941104cf000dfa7563/Provisional_findings_ report_3.pdf

37 https://news.adobe.com/news/news-details/2022/Adobe-toAcquire-Figma/default.aspx

38 Adobe/Figma, CMA's Provisional Findings, paragraph 3.25.

39 Adobe/Figma, CMA's Provisional Findings, paragraph 5.32(a).

40 This is also referred to as image editing or photo editing. See Adobe/Figma, CMA's Provisional Findings, paragraph 5.32(b) and footnote 109.

41 Adobe/Figma, CMA's Provisional Findings, paragraph 9.563.

42 Adobe/Figma, CMA's Provisional Findings, paragraphs 9.571–9.575.

43 Adobe/Figma, CMA's Provisional Findings, paragraphs 9.568 and 9569.

44 Adobe/Figma, CMA's Provisional Findings, paragraph 6.87.

45 Adobe/Figma, CMA's Provisional Findings, paragraph 3.

46 Adobe/Figma, CMA's Provisional Findings, paragraph 6.

47 Adobe/Figma, CMA's Provisional Findings, paragraph 17.

48 Adobe/Figma, CMA's Provisional Findings, paragraph 44.

49 Adobe/Figma, CMA's Provisional Findings, paragraphs 45 and 46.

50 https://ec.europa.eu/commission/presscorner/detail/en/ ip_23_5778

51 https://competition-policy.ec.europa.eu/document/ download/4e7dcad9-4787-4cef-885b-dcc5f8f1244c_ en?filename=kd0124001enn_mergers_brief_2024_2.pdf

52 https://competition-policy.ec.europa.eu/document/ download/4e7dcad9-4787-4cef-885b-dcc5f8f1244c_ en?filename=kd0124001enn_mergers_brief_2024_2.pdf (page 4).

53 https://competition-policy.ec.europa.eu/document/ download/4e7dcad9-4787-4cef-885b-dcc5f8f1244c_ en?filename=kd0124001enn_mergers_brief_2024_2.pdf (page 4).

54 CMA, "Completed acquisition by Facebook, Inc (now Meta Platforms, Inc) of Giphy, Inc. Summary of Final Report", Notified: 30 November 2021 (Facebook/Giphy). Available at: https://assets.publishing.service.gov.uk/ media/61a4bfa2e90e07044a559d57/Facebook_GIPHY_-_ Summary_of_Final_Report.pdf

55 Facebook/Giphy, paragraph 11.

56 Facebook/Giphy, paragraph 11.

57 Facebook/Giphy, paragraph 41.

58 Facebook/Giphy, paragraph 29.

59 Facebook/Giphy, paragraph 44.

60 Facebook/Giphy, paragraph 45.

61 CMA, "Anticipated acquisition by Uber International B.V., a wholly owned subsidiary of Uber Technologies, Inc., of GPC Computer Software Limited Decision on relevant merger situation and substantial lessening of competition" ("Uber/Autocab"), ME/6903/20. Available at: https://assets.publishing.service. gov.uk/media/6093e751d3bf7f6d624f556b/Uber_Autocab_-_ Phase_1_Decision_-_Non_Confidential_final_.pdf

62 Uber/Autocab, paragraphs 20 and 22.

63 Uber/Autocab, paragraph 111.

64 Uber/Autocab, paragraph 127.

65 Uber/Autocab, paragraph 146.

66 Uber/Autocab, paragraph 144.

67 Uber/Autocab, paragraphs 10–11.

68 Uber/Autocab, paragraphs 14.

69 Uber/Autocab, paragraphs 17.

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