Innovation competition assessment by competition authorities

Practical Law UK

Antitrust law practitioners are familiar with the analytical tools that competition authorities use to assess price effects of mergers and acquisitions (M&A). They may, however, be less aware of the methods and data sources such authorities use to assess the impacts of M&A on innovation competition. In an article written for Practical Law UK, Principal Almudena Arcelus and Associate Kevin Feeney discuss the tools that competition authorities use to investigate theories of harm relevant to innovation, including analyses of firms’ research and development (R&D) capabilities, patents, internal documents, and input from key opinion leaders.

When competition authorities assess a merger’s competitive effects, the impact on a firm’s incentives to innovate is an important consideration. Although recent merger enforcement decisions by the European Commission (EC) are the most prominent examples, US antitrust enforcement agencies increasingly cite concerns about harm to innovation in their decisions. In this article, Ms. Arcelus, Dr. Fix, and Dr. Feeney describe methods and sources used by competition authorities to better understand how M&A may positively or negatively affect innovation, if at all.

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Arcelus A, Fix A, Feeney K