We find that a reasonable reading of the available evidence indicates that there has been significant under-enforcement of merger control with respect to the digital platforms. We argue that this under-enforcement means that we should change the standard against which we assess whether such mergers are anti-competitive. We outline several possible ways in which the standard could be changed and highlight the importance of improving competition authorities' treatment of uncertainty. Finally, we discuss the type of analysis that competition authorities should carry out in order to give themselves the best chance of getting merger control decisions right in the digital arena. We highlight the importance of asking the right questions about dynamic competition, rather than focusing on traditional static competition approaches.

Economics plays a central role in effective merger enforcement, as it provides the conceptual framework to assess merger effects. Additionally, effective merger enforcement relies on the merger assessment being firmly rooted in evidence. Economic analysis is often key in interpreting this evidence. This article discusses the role of economists and economic analysis in merger investigations by the Competition and Markets Authority, in particular in relation to the approach to economic analysis and evidence gathering, and the wider contribution of economists at the CMA in developing the toolkit used for assessing mergers.

We discuss three important projects that economists at the Competition and Markets Authority have completed over the past year. First, our work on the Funerals Market Investigation provides an illustration of how demand-side problems can lead to a lack of competition, as well as demonstrating the CMA’s willingness to consider price control and regulatory remedies where necessary. Second, on the Sabre/Farelogix merger case, we point to how our assessment dealt with uncertainty in innovative markets, the importance of preventing incumbents from acquiring start-ups, and the risks of following formalistic market definitions, especially in multi-sided platform sectors. Third, we set out the most notable developments in our revised Mergers Assessment Guidelines—including the assessment of future competition even when subject to significant uncertainty—and the assessment of the loss of dynamic competition and its effect on innovation incentives.

We discuss three important cases that the Competition and Markets Authority (CMA) has completed over the past year: The first two cases—the Experian/ClearScore merger and the Hotel Online Booking enforcement case—demonstrate our recent work on digital industries. We provide an overview of developments in this area and the CMA’s evolving approach to addressing such cases. The third case was a proposed merger between two of the UK’s largest grocery chains: Sainsbury’s and Asda. This proposed merger was ultimately prohibited by the CMA.