Potential Competition, Nascent Competitors, and Killer Acquisitions John M
Potential Competition, Nascent Competitors, and Killer Acquisitions John M. Yun* INTRODUCTION Assessing the competitive impact of acquisitions is an integral part of antitrust enforcement. In fact, there is probably no other area of antitrust enforcement that is as well-developed and formalized as the review of mergers and acquisitions.1 Recently, however, there has been a great deal of attention given to a certain category of acquisitions—namely, the acquisition of potential competitors and nascent competitive threats.2 Relatedly, there is a concern that, post-acquisition, the acquiring firm will * This chapter is based, in part, on written testimony provided on September 24, 2019, before the Subcommittee on Antitrust, Competition Policy, and Consumer Rights of the U.S. Senate Committee on the Judiciary for a hearing entitled, Competition in Digital Technology Markets: Examining Acquisitions of Nascent or Potential Competitors by Digital Platforms. The testimony was reprinted as Potential Competition and Nascent Competitors, 4 CRITERION J. ON INNOVATION 625 (2019). I thank Joshua Wright for providing valuable comments and Scalia Law student Rachel Burke for excellent research assistance. 1 See, for example, U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, HORIZONTAL MERGER GUIDELINES (2010), https://www.justice.gov/atr/horizontal-merger-guidelines-08192010 [hereinafter Horizontal Merger Guidelines], which is based on a strong legacy of prior merger guidelines including major revisions in 1982 and 1992. 2 See, e.g., AUSTL. COMPETITION & CONSUMER COMM’N, DIGITAL PLATFORMS INQUIRY FINAL REPORT 10 (2019), https://www.accc.gov.au/system/files/Digital%20platforms%20inquiry%20-%20final%20report.pdf [hereinafter ACCC Report] (“. a range of factors contributed to each of Google’s and Facebook’s dominant positions in their respective markets.
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