EU Wants More Say In Tech, Pharma, Biotech & Start-Up Mergers

EU antitrust regulators are set to have more say over small merger deals involving start-ups in the technology, biotechnology, and pharmaceutical industries, the EU enforcer announced on Friday, March 26, in a warning to big companies eyeing such deals. 

According to Reuters, the move comes amid regulatory concerns on both sides of the Atlantic that a buying spree of start-ups by big companies, which do not trigger competition scrutiny because of the low value of the deal, may be so-called killer acquisitions.

This refers to a company buying a potential rival still in a nascent stage with the aim of shutting it down.

Critics have often cited the hundreds of small companies acquired by Alphabet’s Google and Facebook in recent years while supporters say such deals provide the money and resources to help start-ups to grow.

The European Commission stated it wants national competition watchdogs to refer more small deals to the EU enforcer. Executive Vice-President Margrethe Vestager, in charge of competition policy, said, “The EU merger procedures have served us well so far. Our evaluation however has identified some areas for improvement. A number of transactions involving companies with low turnover, but high competitive potential in the internal market are not reviewed by either the Commission or the Member States. A more frequent use of the existing tool of referrals under Article 22 of the Merger Regulation can help us capture concentrations which may have a significant impact on competition in the internal market. In parallel, we are also looking at the possible revision of certain procedural aspects of EU merger control. To this end, we invite input from stakeholders on different policy options to achieve further targeting and simplification of the EU merger control procedures.”

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