Nascent competition: crystal ball gazing or a principled approach to regulatory oversight?

Amid intense regulatory scrutiny of transactions in innovation-heavy industries such as tech or life sciences, competition authorities' focus on deals involving 'nascent competition' only looks set to intensify in the year ahead.

As part of the growing focus in this area, competition authorities around the world are continuing to stretch boundaries of the law, and in some cases jurisdictional reach, to be able to conduct in-depth probes into deals that may involve nascent competition; and, as part of this, are willing to speculate very far into the future of rapidly evolving markets. In doing so, the authorities are increasingly scrutinising a growing range of non-price-focused theories of harm (focusing, for example, on factors such as choice and innovation), and closely analysing acquirer valuation models and a transaction’s underlying rationale.

However, despite the crystal-ball gazing inherent to all merger control assessments (but particularly so in the context of the rapidly evolving – and growing – digital economy) – and the potentially significant risks of stifling future innovation and potential consumer benefits through potential over-enforcement – competition authorities around the world are calling for new regulatory proposals to be enacted which explicitly aim to enable them to more easily examine – and enforce against – deals involving nascent competition.

In our latest episode, podcast host Jenn Mellott is joined by Ninette Dodoo (Partner and co-head of the firm’s competition practice in China), Jan Rybnicek (Counsel, Washington DC) and Sharon Malhi (Senior Associate, London) to discuss the evolution of an increasingly interventionist approach to nascent competition across the US, UK, Europe and Asia. They explore the evolving – and at times conflicting – approaches to analysing deals involving nascent competition across jurisdictions and how multinational companies can best navigate the heightened global scrutiny.

Listen to the podcast now.