Killer Acquisition Theory in the Digital Age

https://www2.slideshare.net/mberre/berre-petit-2020-killer-acquisition-theory 

Max Berre and Nicolas Petit

This paper seeks to contribute to the growing literature on killer acquisitions and to the debate contextualizing the emergence of the Big-Data industry, in order to enrich and inform the debate, proposing threshold ideas for purposes of abuse of dominance and merger control. To that end, it takes a different approach, deconstructing the killer acquisition narrative. Because killer acquisitions are defensive in nature, serving to protect the market-share of incumbent firms.   

Overall, the debate can be approached via the examination of the relative likelihoods of competing acquisition objectives, effects, and contextual realities. Testing these may yield viable examination tools which could be put to use in real-world policy, advisory, or litigation contexts. The killer acquisition narrative is based on several conjectures that must be critically examined and rigorously tested prior to undertaking policy reform. This paper’s contribution is to provide a framework for said critical examination.

The 21^st-century emergence of the fourth-industrial-revolution has given rise to new technological and economic realities. The Big-Data and Internet of Things (IoT) industries in the digital marketplace has given rise to heated and lively debate concerning market-structure and competition-policy ramifications going forward as the 21^st century develops.

Because traditional measures and dynamics are fundamentally challenged by both the technology and the associated economic dynamics of 21^st century digital markets, exploration of the market-structure measures and dynamics of industries related to the fourth-industrial-revolution is increasingly necessary as new market-realities evolve. 

What is called for in a practical sense, is an examination of the various ways in which start-up acquisitions in the digital market-space can be examined, approached and weighed, for purposes of ex-ante or export investigation of mergers, acquisitions, and abuse of dominance.  

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Max Berre is an economist at Audencia Business School who has worked as a sovereign debt expert at the Inter-American Development Bank in Washington and has taught financial economics at Maastricht University in the Netherlands.

Nicolas Petit is a professor EU Competition Law based at the European University Institute, and is Joint Chair in Competition Law at the Department of Law and at the Robert Schuman Centre for Advanced Studies. He is also invited Professor at the College of Europe in Bruges.