Merger control in the digital age – Challenges and development perspectives

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In the past few years, the German and European legislators have created new rules for large companies active in the digital sector. Both Section 19a of the German Competition Act (GWB), which was introduced as part of the 10th amendment to the GWB, and the Digital Markets Act (DMA), which is due to enter into force shortly at a European level, make it possible in this context to effectively terminate certain types of potentially abusive unilateral conduct by large digital corporations. However, special characteristics of mergers in the digital sector have so far not been the main focus of legislators although both the 19th German Bundestag and also the currently governing coalition have already indicated that action is needed in this regard. In the literature and in various expert opinions it is noted that the particularities of mergers in the digital sector may make it necessary to critically reflect on the current legal situation and enforcement practice.

This paper is intended to trace the outline of the discussion about mergers in the digital economy. For this purpose, the paper will first address the characteristics of digital business models and markets (I.) as well as the relevant challenges for merger control resulting from these characteristics (II.). The following sections will then deal with the implications these particularities have for the formal (B.) and substantive (C.) criteria for prohibiting a concentration in merger control proceedings. After drawing a conclusion (D.) the background paper will close with a compilation of selected open questions currently arising in the discussion about mergers in the digital sector (E.).