CHANGING CONTOURS OF MERGER CONTROL: EXPLORING THE ENFORCEMENT GAP IN REGULATING NASCENT ACQUISITIONS

Abstract

This paper deals with the anticompetitive effects of nascent acquisitions. The traditional approach in merger control is based on the turnover of the merging entities, assets, and other notifiable requirements. More often than not, acquisition involving nascent competitors do not meet the required thresholds, and hence evade antitrust scrutiny. At other times, though the threshold of the acquisition invokes the jurisdiction of the regulator, it escapes the liability due to existing loopholes in the enforcement framework. The authors analyse the peculiarity of major jurisdictions (US, EU, UK and India) in tackling the issues involving nascent acquisitions, and attempt to locate the existing enforcement gap within the larger debate of regulating nascent acquisitions. Recent research and empirical data have shown the evolution of various theories of harm with respect to nascent acquisitions. This paper specifically deals with the Killer Acquisition theory and the Nascent Potential Acquisition theory. The apprehension of harm caused by such acquisitions is prevalent in dynamic markets, such as pharmaceutical markets and new-age digital markets. The authors argue in this paper that the potential for harm in cases of nascent acquisitions should be duly addressed and dealt with in order to ensure continuous innovation in dynamic future markets.