By Dr Andrea Coscelli, CMA
Like many agencies around the world, the CMA has had a growing focus on digital commerce, reflecting changes in the economy and consumer behaviour. Much of our recent casework has had a strong digital flavour, and our policy and advocacy work is increasing in this area too.
But the effectiveness of merger control in digital markets has been the subject of particular discussion and attention recently and I want to focus on that today. Over the last decade, Amazon, Apple, Facebook, Google, and Microsoft combined – the so called GAFAM quintet – have made over 400 acquisitions globally, with more than half of these – close to 250 – just in the most recent 5 years. Some of these acquisitions have had exceptionally high valuations.
However only a handful of these mergers have been scrutinised by competition authorities, and none have been blocked. As an economist, these statistics naturally lead me to question whether we as competition authorities have got the balance right. Is it right that across all 400 of these acquisitions, there has not been a single prohibition? On this basis, is it possible to argue that we’ve correctly balanced the risks of under- and over-enforcement?