Commissioner Vestager is certainly consistent when she comments on applying competition law to the digital economy; indeed it feels a bit like a crusade. Whether it is Google, the e-commerce sector inquiry and the review of telecom mergers via Amazon tax rulings, she has been reflecting on the role of DG Competition in the sector.
Perhaps no surprise, then, when she told at a conference in Brussels on 10 March that mergers in the digital space would not escape her consideration. This might have been as a result of the EP’s report on the latest DG Competition annual report on EU Competition policy which urged her to address mergers in fast moving markets such as the digital economy.
She herself combined a number of her own reflections on mergers in her speech (minority shareholdings for one) noting that important deals involving digital companies might slip under the radar, as the current rules consider only the turnover of merging companies. She highlighted the example of Facebook/WhatsApp, where the Commission was notified even though the turnover wasn’t sufficient enough to merit a review.
Her argument is that the value of a merger could be considered in terms of data, customer base, or company’s ability to innovate. A merger of these types of company, she says, can affect competition and should be looked at but might escape current thresholds. Vestager has set her team working on these issues, and she encouraged the audience to get involved too.
Ensuring the views of business are adequately represented in any consultation process represents an invitation that is difficult to turn down.
Would that mean a change in merger regulation criteria? And if so, does she see this as the legacy of her mandate?
Well, it is a novel issue and this industry moves faster than light, so the Commissioner needs to be quick in her decisions and actions. Most importantly – and as she herself acknowledged – whatever test the Commission chooses must be easy to apply and give a definitive answer. Companies should thus grasp the opportunity to engage with her in the debate.
FTI’s Strategic Communications Competition Practice