DOJ/FTC Vertical Merger Rules Called 'Too Permissive'; Can Europe Grow Its Own Tech?

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Do Not Merge

A group of antitrust economists filed comments on the new DOJ/FTC draft guidelines for vertical mergers, calling the new draft “excessively permissive” for large companies. Historically, antitrust cases focus on horizontal acquisitions, when a company buys a direct competitor. But old rules don’t apply to new market dynamics. Vertical acquisitions “greatly increase the opportunity to monopolize access to data,” according to the economists. For example, the DOJ approved Google’s acquisition of travel booking software ITA in 2011. In 2018, Google closed the ITA API, a valuable source of search metadata, and launched its own flight search product. Vertical mergers can also remove direct competitors from the market, even if regulators don’t see direct connections. Facebook’s acquisition of Instagram and WhatsApp were not considered horizontal deals, since at the time those companies were considered a photo-sharing startup and a messaging service, respectively. Facebook understood that Instagram, which at the time had 30 million users and zero revenue, was a potential direct threat. Do regulators see that as well? Hal Singer, professor at Georgetown’s McDonough School of Business, has a Twitter thread with more info.

Big Tech EU

Speaking of antitrust, Big Tech may soon have to start sharing more data with smaller companies that use their platforms in the EU, as the bloc investigates how platforms use other companies’ data to stamp out competitors. The rules, unveiled Wednesday, also include stricter regulation over the use of AI and machine learning by American and Chinese companies and aim to fine tune liability rules for big tech companies around content shared on their platforms. Behind the push is Europe’s desire to incubate tech giants of its own, rather than stay beholden to American and Chinese companies. The EU hopes to attract $21.6 billion in investment this year to compete in big data and AI, The Wall Street Journal reports. “We recognize we missed the first battle, the battle of personal data,” said EU Commissioner Thierry Breton. “Europe has everything it takes to lead the ‘big data’ race, and preserve its technological sovereignty.” More.

Celebrities? Who Needs ’Em

Facebook is leaning into creators to grow viewership and programming on Watch. Rather than signing deals with A-list talent, it will tap into influencers to create “timely, culturally relevant content that can draw in a community,” Anna Higgs, Facebook’s head of media and entertainment partnerships for Northern Europe, told Variety. “Creators exhibit those pillars really well,” she added. As far as Facebook is concerned, influencers can draw in just as much engagement as its flagship celebrity-driven shows such as Jada Pinkett Smith’s “Red Table Talk.” Influencer account LadBaby, for example, drew in 4.8 million views on a Watch video called “I Love Sausage Rolls,” which included an original song that hit No. 1 on the UK charts over Christmas. “We don’t have to commission shows for (Watch) to be a huge success,” Higgs said. More.

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