Competition regulators across the world have traditionally perceived non-horizontal mergers as less likely to be problematic because there is substantive scope for efficiencies.

We expect vertical and conglomerate mergers, especially in the life sciences and digital sectors, to continue being in the spotlight in the EU and US in 2023 and beyond. Illumina/Grail, Meta/Kustomer, Meta/ Giphy, Microsoft/Activision Blizzard, Nvidia/Arm or Lockheed Martin/ Aerojet exemplify this trend.

Notably, Illumina/Grail has been the first EC prohibition based exclusively on vertical concerns. In the UK, the CMA recently commissioned an evaluation of vertical mergers, while in the US, the new Merger Guidelines are expected to drop the emphasis on vertical mergers’ efficiencies. In its calls for ex-ante regulation of the tech sector, the ACCC has raised concerns that acquisitions by digital platforms in adjacent markets are increasing and entrenching their market power, and has indicated this as an area of focus.

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