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Innovation in EU Merger Control: In Need of a Consistent Framework

Raphaël De Coninck, Competition Law & Policy Debate (Vol. 2), September 2016

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The European Commission has recently shown great interest in assessing the impact of mergers on innovation. As highlighted below, the Commission has in particular been more interventionist in recent pharmaceutical mergers, requesting divestments of pipeline products including in some cases at an early stage of development, such as in Novartis/GSK Oncology. The Commission has also stressed the need to protect innovation as a rationale for divestment in other technology-driven industries, most recently and prominently in the context of the GE/Alstom transaction. This article discusses the approach followed by the Commission and argues in favour of developing a consistent framework for assessing the impact of mergers on innovations. Such a framework could help the Commission’s case teams assess the impact of mergers on innovations –taking into account both pro- and anti-competitive innovation effects-, and make the analysis more predictable for companies. This article argues that such a framework cannot rely on general presumptions of the effect of mergers on innovation, but rather highlights the key considerations for a sound case-by-case assessment, and favours a relatively cautious approach.

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