Not all Tech M&A is doomed for intervention: Linklaters lawyers contribute to important new book separating the signal from the noise

Tough talk about the greater level of scrutiny tech mergers now face is part of enforcers’ global hymn-sheet. But even in 2021, deal making continued at pace and the majority of tech deals either avoided merger control scrutiny, or survived it unscathed. And intervention didn’t always occur in the most predictable places. The hotly debated Google / FitBit merger was cleared by all major global authorities (albeit with a controversial remedy package), while Facebook / GIPHY was prohibited by the CMA (the decision is currently under appeal).

Algorithmic Antitrust

In reality, most tech deals can still be done – but working out which deals will cause merger control headaches demands putting aside the noise and identifying the signal. A new book published this week, Algorithmic Antitrust, aims to do just that. 

The book is the first comprehensive review of algorithms across all dimensions of competition and antitrust policy and offers an alternative approach to the predominantly pessimistic views commonly making headlines.

Algorithms, Big Data and Merger Control

Together we authored the chapter on Algorithms, Big Data and Merger Control and our review of the approach of merger authorities to mergers of algorithm-driven businesses shows that despite the headlines, establishing competitive harm on the basis of the accumulation of data or use of algorithms remains a tall order for merger control authorities. 

In our chapter we catalogue the different justifications given by authorities to intervene in tech mergers with a view to shedding light on how new mergers will be approached. We identify the rise of a new approach to reviewing mergers, focused on dynamic competition, as most likely justification authorities will use to stop mergers going forward. We also determine that the UK is the most likely location for these new approaches to develop as the CMA settles in at the top table of global enforcers.

This means assessing the likelihood of a merger control headache needs to consider not only parties’ current and pipeline approach to using data and algorithms, but how each business is likely to evolve (even into the more distant future) absent a merger. It also means – as is a common theme on Tech Insights – that any deal with even a tangential link to the UK needs extra special care.

Read more on the UK approach

To read more about the uniquely interventionist approach of the UK’s CMA, visit Linklaters' dedicated blog: Platypus.