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10 months ago in Competition Law By Meera

What’s the deal with competition policy for big tech mergers?

I keep hearing regulators are cracking down on tech mergers. What exactly are they worried about when Facebook or Google buys a small startup?

All Answers (2 Answers In All)

By Raghu Answered 4 months ago

It's not about size it's about strategy. Regulators are laser-focused on "killer acquisitions" : buying a promising young competitor just to shut them down before they become a threat. They're also worried about data concentration (hoarding user info as a moat) and network effects that make a platform unstoppable once it reaches critical mass. The goal isn't to block all deals. It's to stop the ones that entrench monopolies and kill innovation before it has a chance to breathe.

 

By Jayanti Patil Answered 8 months ago

From my experience advising on tech mergers, the shift is fundamental. In the 90s, we had a price-centric toolkit. Today, price is often zero, so that tool is useless. We now scrutinize what I call innovation markets and data assets. When Facebook acquired Instagram, the price was free for users but the elimination of a potential future rival was the real currency. Regulators are now asking: does this merger entrench an ecosystem? Does it consolidate control over user attention or data in a way that raises barriers for the next generation of entrants? It's a move from static price effects to dynamic, long-run competitive effects.

 

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