Merger control in the digital age – Meeting of the Working Group on Competition Law

The Working Group on Competition Law met on 29 September 2022. At the invitation of the Bundeskartellamt more than 90 competition experts joined the discussion and exchange of views on “Merger control in the digital age – Challenges and development perspectives.”

The Working Group on Competition Law is made up of a large number of university professors from law and economics faculties, high-ranking representatives of national and European competition authorities and ministries, as well as judges from the antitrust divisions of the Düsseldorf Higher Regional Court and the Federal Court of Justice. For more than 50 years the Working Group has met annually to discuss fundamental issues of competition policy.
The meeting was chaired by Prof. Dr Konrad Ost, Vice President of the Bundeskartellamt.

Prof. Dr Ost: “Merger control is the only tool available to us to prevent anti-competitive concentration of economic power. In the digital economy in particular, the stakes are very high. This sector is characterised by only a few major players and a high level of concentration. Some companies have strong positions of economic power across markets, which can be further expanded by takeovers. However, some problematic mergers cannot be caught by the currently applicable rules, or a prohibition is simply impossible because of high legal obstacles. For these reasons this year’s meeting of the Working Group on Competition Law has focused on this issue.”

The Working Group on Competition Law mainly discussed two areas in which problems arise for effective merger control within the context of takeovers by large digital companies:

- An issue discussed in the literature and in case practice concerns so-called killer acquisitions. The term describes the strategy of large companies to acquire smaller (potential) competitors in order to stop their innovation activities or remove already existing products from the market. There is concern that merger control has so far not sufficiently been able to prohibit such projects.

- It is also feared that large digital companies could use mergers to expand or strengthen their ecosystems consisting of various interrelated products and thus secure or expand their positions of power.

Konrad Ost: "The Working Group on Competition Law has also looked into possible solutions to the current problems faced by merger control in the digital age. The introduction of stricter merger control rules for companies with paramount significance across markets could be an expedient approach, as was recently also stated by the Association of German Jurists. Stricter merger control in the digital sector could reasonably complement the extended abuse control rules (Section 19a GWB) which came into effect in early 2021."

The meeting opened with a panel discussion. Within this context Prof. Dr Tomaso Duso (Technische Universität (TU) Berlin; German Institute for Economic Research (DIW); Monopolies Commission) explained the challenges for merger control arising from the characteristic features of the digital economy. Prof. Dr Justus Haucap (Heinrich Heine University Düsseldorf) examined possible negative and positive effects that digital mergers could have on innovation. Prof. Dr Viktoria Robertson (Vienna University of Economics and Business, University of Graz) discussed proposals for adapting or developing the legal framework. Julia Brockhoff (European Commission, Directorate-General for Competition) and Sandro Gleave (Bundeskartellamt) reported on practical experiences in the examination of merger projects in the digital economy.

Following the panel discussion, Dr Thorsten Käseberg (Federal Ministry for Economic Affairs and Climate Protection) spoke about the Ministry’s competition policy agenda in the current legislative term. He also provided a prospective view of the 11th amendment to the German Competition Act.

The working paper which formed the basis for the discussion and the contributions of individual conference participants can be found on the Bundeskartellamt’s website (as soon as available and in German only).