The era of tech giants buying and buying may come to an end

The arbitrary acquisitions of large technology companies may become history. As EU antitrust regulators scrutinize the M&A boom, both sides of the deal will face a liquidation, where they may be forced to make concessions or even be required to cancel the deal. These regulators are exercising new powers, or are on the verge of acquiring new capabilities, wrapping companies like Apple or Amazon in regulatory "tights" that will bring real change to the way they operate.

Globally, more than $5 trillion in mergers and acquisitions were concluded in 2021, nearly $1 trillion higher than the previous record set in 2007, the data shows.

Michele Davis, a lawyer at the Firm Freshfield Bruckhaus Deringer in London, said regulators seemed more willing to see the negative side of these collaborations than the positives for these deals.

Davis said: "Both parties to the transaction need to prepare for increased scrutiny of the transaction in 2022. Davis argues that it is a trend to regulate big business more aggressively, driven by increasing political pressure from antitrust agencies.

Nvidia's deal to buy British chipmaker ARM shows that the deal is at risk when competitors complain that the acquisition will stifle competition. U.S. regulators have filed a lawsuit to block the $40 billion deal. The British government is launching a second phase of investigation into the deal on national security grounds to assess whether it will be rejected. Similarly, the EU is "deeply concerned" about the deal.

Last month, Britain's antitrust regulator, the Competition and Markets Authority (CMA), vetoed Facebook's parent company Meta's acquisition of Giphy, saying it was an obstacle to market competition. The aim is to discourage so-called "killer" acquisitions, in which large companies acquire potential innovative emerging competitors.

In addition, the CMA's "digital market division" also plans to make its debut earlier this year, aiming to introduce "strategic market position" measures that limit how internet giants can expand into new areas.

Last week, Germany's antitrust agency, the Federal Cartel Office (FCO), announced that it had decided to launch a broader antitrust investigation into Google and its parent company Alphabet under the authority conferred by the latest antitrust law. In addition, the Federal Cartel Bureau is considering further cases related to Amazon, Apple and Meta.

The EU will also curb big tech companies under the planned Digital Markets Act and Digital Services Act. (Proofreading/Seven-Seven)