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A presumption of harm in innovation merger cases: Creating an unfair barrier?

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The last decade has witnessed a noticeable shift in approach by the European Commission, whereby innovation competition has gained increasing prominence in merger assessments, particularly in the pharmaceutical, agrochemical, and digital industries. In addition, the Commission is taking a more interventionist and aggressive approach, leading some to question whether there will be a growing number of prohibition decisions based on innovation competition concerns.

The paper analyses whether the Commission’s approach in recent cases is leading to the gradual introduction of a presumption that mergers in highly concentrated innovation markets will result in harm to consumers, thereby shifting the burden back onto merging parties to establish that the impact of the merger will be neutral from the perspective of consumer welfare.

The paper then proceeds to assess the merits of a presumption in considering whether it would be a preferable development in assisting the Commission to establish harm, or alternatively, whether a fact-sensitive approach should be maintained due to the complexity of innovation harm assessments.

Finally, the author evaluates the recent suggestion that large technology companies should in fact be required to demonstrate the benefits to consumers of any acquisition they make, as opposed to merely establishing that they will not cause harm.