Remember Stacker? Another Look at “Killer” Acquisitions in the Digital Economy
CPI Antitrust Chronicle, May 2020
The line between pro-competitive and anticompetitive effects of so-called “killer” acquisitions in the digital market has drawn increasing antitrust scrutiny. In “Remember Stacker? Another Look at ‘Killer’ Acquisitions in the Digital Economy” in Competition Policy International, Analysis Group Managing Principals Divya Mathur and Marc Van Audenrode discuss the need for thoughtful antitrust analysis of digital acquisitions.
In a so-called “killer” acquisition, an incumbent buys a potential competitor and “kills” its innovative product in order to strengthen its own market position. This article studies the digital economy’s competitive dynamics and the motivations of early-stage and established companies, using as examples transactions between Microsoft and Stac Electronics, Amazon and Kiva Systems (now Amazon Robotics), and Microsoft and Hotmail (now Outlook.com). Given the complexities of any digital acquisition, the authors suggest that competition authorities must carefully consider the context of each individual transaction to accurately determine the balance of pro- and anticompetitive effects.
Authors
d’Udekem B, Mathur D, Van Audenrode M