The EU Merger Regulation and Innovation : To what extent does EU merger control address harms to innovation in digital markets arising from killer acquisitions?

Since 2021 with the introduction of new guidelines concerning the interpretation of article 22 of the EU merger regulation, there has been a realisation that current merger control is unable to review deals involving companies with minimal turnover but enormous innovative and market potential. In the pharmaceutical sector, this led to the term called Killer Acquisitions (KA) where established market incumbents buy out their competition at an early stage with a goal of stopping their threatening market behaviour. In other words, killing the innovation which would have displaced them from their privileged market position. It’s not just a pharmaceutical sector phenomenon as it has appeared in the digital sector as well. We followed a legal doctrinal methodology to assess whether the EU merger regulation addresses harms to innovation arising from KA in digital markets. To support this we used a qualitative research design to explain relevant business theories in mergers and acquisitions. Our conclusion was that there exists a framework to address harms to innovation, but because digital markets have unique characteristics, we have a situation in which some transactions never reach the threshold needed to be reviewed under the regulation.