Merger Control in Dynamic Markets

The competition dynamics observed in rapidly-evolving sectors, such as high-technology, consumer services and online retail, is challenging the role of competition authorities in merger control, where enforcement decisions depend on an effects-based analysis of the likely future effects of the merger. As these sectors are typically characterised by high entry and exit rates, as well as innovation that continuously disrupts existing business models, it is increasingly harder for authorities to predict how markets will evolve in order to support merger decisions. This is made worse by the fact that many of the merger tools currently available tend to focus on the recent-past or current state of the market, instead of looking forward at how the market might evolve post-merger. This paper discusses the role of merger control in dynamic markets and identifies the main practical proposals that have been made to adapt the different stages of the review process to take into account market dynamics over time: (1) the competitive assessment of the merger, (2) the analysis of efficiency effects and (3) the design of remedies.