Commission targets tech in merger control consultation

Author: Tom Young | Published: 26 Oct 2016

The European Commission’s latest consultation on further simplifying merger control also highlights its intention to catch high value technology mergers.

Its October 7 consultation questionnaire seeks comment on a range of changes to the existing regime, including the possible introduction of block exemptions from the filing obligation for certain types of transaction. But the suggestion of targeting mergers based on transaction value could stifle the market dominance of the new breed of data-rich but revenue poor tech companies. The so-called high value acquisitions in question are those that currently fall under the Commission’s jurisdiction due to not meeting its revenue-based threshold.

These typically take place in the tech sector where revenues can initially be poor, and where even an asset test would fail due to majority of companies being headquartered outside the EU in the Silicon Valley. The much-cited Facebook/WhatsApp transaction is thought to be the behind the...