Trends in Merger Control and Competition: The In-House Perspective

TransPerfect Legal Solutions

On 26 January, 2021, TransPerfect Legal Solutions (TLS) kicked off a virtual conference on EU and UK competition regulation. This article is the third of a three-part series highlighting the major takeaways from each session of the conference.

The closing panel featured three in-house competition lawyers from diverse industries: Diogo Pereira from Facebook, Hanna Danwall from Carlsberg and Michael Lukes from Virgin Atlantic Airways. The session provided three key takeaways on trends in merger control from the in-house perspective.

We are entering a new age of merger control regulations for the digital sector.

Merger controls in the digital and technology space are one of the hottest trends in competition regulation on a global basis. From the CMA’s new proposed rules, to the US Congress hearings by the Antitrust Subcommittee, to the cross-European regulatory focus, the future of competition regulation will differ materially for Big Tech and the digital sector at large.

There are fundamental changes being discussed with respect to both how many technology transactions will be reviewed and what factors those reviews will consider. There is a perceived historical under-enforcement in the digital space, specifically on acquisitions relating to nascent competitors and vertical integrations, which is driving the current focus on this sector. The resulting regulatory changes will likely manifest in right-to-block transactions, a lowering of the standard of proof to find competitive harm, increased scrutiny of so-called “killer acquisitions” and a lowering of monetary thresholds for merger review.

Sustainability policy will impact competition regulation in unprecedented ways.

Europe is leading the charge on integrating sustainability and environmental priorities into competition policy. The goal is to reduce competition-driven obstacles to information sharing and collaborative initiatives amongst traditional competitors.

European regulators are adopting the view that competition law should play a role in driving sustainability initiatives to better support the Green Deal. The goal of the Green Deal is for Europe to be the first climate-neutral continent by 2050, where, in the words of one panelist, ‘economic growth is decoupled from resource use.’ With this in mind, the European Commission has requested contributions for collecting ideas and proposals on how competition policy can play a greater role in attaining these goals.

The challenge is that sustainability initiatives can increase costs for companies on an individual basis. But through collaboration between historical competitors, none will be disadvantaged by bearing these costs alone. Of course, a collaborative approach to sustainability-focused R&D and sharing of resources can run afoul of the traditional principle of competition, hence the desire to shift mindsets and practices in this area.

The journey from private practice to in-house competition counsel presents new challenges and complexities.

Each of the panelists shared a career progression from sophisticated, market-leading law firm competition practice to an in-house role – and each reported the same new challenges in that different capacity. The pace of the in-house advisor’s role is materially different, requiring a multifaceted understanding of not only legal concerns, but also real-time operational needs and financial impacts as business decisions are made and strategies formulated.

Further, in the in-house role, competition regulations are less of a binary set of rules to apply in hindsight and more an important set of regulations that need to work in practice. In the law firm, you are working in a bubble in which you do not see all the facets of how a business works and the practical implications of competition concerns on operations. Sometimes you were giving advice without having that context in mind. Being in-house gives you the whole context you need to make competition law advice work in practice.

To view a recording of this panel, please click here. You may also read the two previous blogs in this series, ‘The Impact of Brexit on EU and UK Merger Control Proceedings’ and ‘Leveraging Technology to Manage Big Data in Antitrust.’

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TransPerfect Legal Solutions

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