The legal outlook for antitrust and foreign investment 2024 – focus on Tech

In our Antitrust & Foreign Investment Legal Outlook 2024, we explore the regulatory developments and antitrust enforcement challenges that businesses are expected to face in the year ahead and how best to prepare. In this 2 minute read, we identify the key themes that tech businesses or those investing in tech should be aware of. 

Increasing regulatory hurdles for M&A…

With several high profile deal “casualties” in 2023, tech firms hardly need to be told that regulatory scrutiny of tech M&A is at an all-time high. Tech companies should expect new hurdles for M&A transactions coming across merger control, foreign investment, and the “New Kid on the Block” in 2023: the extensive Foreign Subsidies Regulation in the EU. Filings are also getting more burdensome, with major changes expected to the US merger filing form.

Transactions falling outside mandatory merger control thresholds regime are no longer “safe” from scrutiny. Pressure over perceived historical “under-enforcement” has spurred authorities in some jurisdictions to expand their jurisdiction, including in the EU and China. US authorities are using their powers to “call-in” non-reportable acquisitions. Others are considering the introduction of new merger regulations or revamping current regimes. 

Acquisitions by larger digital market players are  in the spotlight, particularly in the EU and UK. The DMA in the EU and forthcoming DMCC Bill in the UK will make reporting of planned acquisitions mandatory.  But scrutiny is not limited to the big players as enforcers refine their toolkits.

…especially foreign investment screening for technology investments

The destabilising effect of ongoing conflict and geopolitical tension has resulted in never-before-seen levels of regulation and enforcement in foreign investment control. 

Driven by national security concerns, once permissive jurisdictions are carefully scrutinising (and in some cases halting) tech-related acquisitions that could pose risks to national security. Expect more enforcement in 2024 together with further strengthening of regimes including potential scrutiny of outbound investments.  

Semiconductors, microelectronics and AI will all be firmly in the crosshairs of foreign investment regulators. In China, geopolitical factors bearing on security of supply will continue to factor heavily into merger control scrutiny of these sectors as well as the enforcers navigate expanding export control regimes.

New regulation on conduct by tech companies

With six companies designated as gatekeepers under the Digital Markets Act, the clock is ticking – compliance reports are due in March. But numerous ongoing challenges to the DMA’s scope may still shape who has to do what. 

Other jurisdictions are following the EU’s lead, with implementing regulations in force in many Member States, and other global authorities, including Brazil, planning their own versions. In the UK, the DMCC Bill is expected to take effect before the end of 2024, giving the CMA’s Digital Markets Unit unprecedented discretion to administer a regime with powers that could extend beyond those of the DMA. 

Ongoing public and private enforcement

Antitrust cases will continue both in respect of platforms’ conduct outside the scope of the DMA (e.g. tying), and non-“core platform services”, such as generative AI. 

And in court rooms, all eyes are on Google in the wake of a resounding jury verdict in favor of Epic threatening to open its Android systems and a pending trial verdict in the DOJ’s long-running search case. The EU's Court of Justice will set precedent on “self-preferencing” through its “Google Shopping” judgment. 

The volume of regulatory activity is likely to support continued high levels of private enforcement. Traditional “follow-on” damages claims are booming including in China where requiring Alibaba was recently ordered to pay RMB 1 billion in damages to JD.com for exclusionary conduct previously penalised by SAMR. But companies are facing an ever growing number of “standalone” damages claims - not only in their traditional home of the US, but also in the UK, the Netherlands, Portugal and beyond. 

Read more

Antitrust & Foreign Investment Legal Outlook 2024.

Competition regulation in digital markets 5 Themes in 5 Minutes 

Tech Legal Outlook 2024 and for our full Legal Outlook 2024 series: Linklaters Legal Outlook 2024.