Feb 9, 2024 - Business

Europe expands rules to crack down on tech mergers

Illustration of the EU flag with a hole in it revealing code beneath

Illustration: Sarah Grillo/Axios

The European Union this week tightened its antitrust screws on tech companies, announcing that it now will consider the impacts of free products and "digital ecosystems."

Why it matters: Antitrust disputes often boil down to how markets get defined, and this move broadly expands those definitions in Europe.

Details: This is an update to the EU's Market Definition Notice, a rule first passed in 1997 to help European regulators determine if a company has enough market power to create anticompetitive conditions and/or control prices.

  • As Reuters' Foo Yun Chee writes: "[It] follows criticism from lawyers and academics that the European Union's antitrust and merger laws have failed to keep up with the times, especially in tech markets and with companies offering free products or services in exchange for users' data."
  • Or, as EU antitrust chief Margrethe Vestager put it: "A lot can happen in 25 years, as most of us realize when we look at old pictures of ourselves."

The domestic picture: U.S. antitrust regulators don't have this sort of authority, no matter the expansive philosophies of some current officials.

  • But they'll get to indirectly benefit, since the new EU rules are most likely to be applied to global tech giants.
  • For example, think about how EU regulators just stopped U.S.-based Amazon from buying U.S.-based iRobot, without the FTC having to lift a legal finger. And that was before the European merger cops gained new powers.

The bottom line: Global deal activity is on the rise, but so is global deal scrutiny.

Go deeper