The Increasing Cross-Border Importance of Innovation in Merger Review

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In this article published in Antitrust Magazine, Jennifer Cascone Fauver, Dr. Subramaniam (Subbu) Ramanarayanan, and Dr. Nicola Tosini offer guidance on navigating merger investigations where innovation concerns may feature prominently. The authors review the economic mechanisms underlying how mergers might affect the parties’ incentives to innovate. They go on to discuss these mechanisms in the context of recent merger reviews by US and EU antitrust authorities where concerns about innovation played an important role. The authors also discuss the evidence and analyses used by the antitrust agencies to assess innovation effects. The authors conclude that the trend in enforcement decisions coupled with the recent stream of economic literature examining innovation effects point to a regulatory environment where concerns regarding the impact of transactions on innovation will continue to play a major role.