Elena Argentesi, Paolo Buccirossi, Emilio Calvano, Tomaso Duso, Alessia Marrazzo and Salvatore Nava ‘Merger Policy in Digital Markets: An Ex Post Assessment’ (2021) Journal of Competition Law & Economics 17(1) 95

This paper, available here, presents a broad retrospective evaluation of mergers and merger decisions in markets dominated by multisided digital platforms. It identifies almost 300 acquisitions carried out by three major tech companies— Amazon, Facebook, and Google—between 2008 and 2018, looks at the business logic behind these transactions, and explores the theories of harm that have been used or, alternatively, could have been formulated by authorities. The paper then retrospectively examines two important merger cases, Facebook/Instagram and Google/Waze, providing a systematic assessment of the theories of harm considered by the UK competition authority, as well as evidence on the evolution of the market after the transactions were approved. Section II looks at the wealth of mergers and acquisitions (M&A) carried out by key digital platforms between 2008 and 2018. Companies active in digital markets are remarkably active in M&A, constantly seeking out interesting start-ups and purchasing them. Between 2008 and 2018, Google acquired 168 companies, Facebook acquired 71 companies, and…

Andrew P McLean ‘A Financial Capitalism Perspective on Start-Up Acquisitions: Introducing the Economic Goodwill Test’ (2021) Journal of Competition Law & Economics 17(1) 141

In recent decades, major technology firms have acquired hundreds of nascent companies. Between 1987 and 2019, Google, Apple, Facebook, Amazon and Microsoft (GAFAM) acquired over 700 companies. There have been over 430 acquisitions in the last ten years alone. The acquisition of start-ups by major technology firms poses a significant anticompetitive threat, yet such transactions often escape competition scrutiny because they fail to trigger merger notification thresholds. This paper, available here, provides a financial analysis of historic acquisitions by Google, Apple, Facebook, Amazon and Microsoft. Acquisitions in the digital economy are typically characterised by astronomical transaction values relative to the stature of the acquired firm—targets are typically young, lacking in tangible assets and yet to earn significant revenues. Given this, the paper introduces a new merger notification threshold — the economic goodwill test. The economic goodwill test is a concerned with the value of a target’s net tangible assets as a proportion of total transaction value. The difference between these…