This thesis examines the Intellectual Property ("IP") -related merger remedies in the Pharmaceutical and Information Communication and Technology ("ICT") sectors from 2004 to 2014, against the background of the relationship between innovation and merger regulation in the European Union ("EU"). The increasing importance of IP assets in Mergers and Acquisitions ("M&A") and the need for efficient identification and implementation of merger remedies forms the basis of the examination.
The thesis begins by analysing the legal and economic foundations of the IP and
competition law interface in EU competition law, through examining leading cases and academic studies and literature on this issue. Although the interface between IP is suggested that in the current scenario (where the market is technology driven),
merger remedies cannot achieve their objective without having a comprehensive
approach in place to ensure the proper selectionof appropriate remedies (structural.
Behavioural and hybrid) and their process of implementation.This finding (based on the general nature of IP-related remedies) was tested through analysis of the finding ofex post merger remedies studies conducted by the EU (2005); US (1999); UK (2007); OECD (2004); and ICN(2005).
After understanding and examining the IP-related merger remedies mechanisms in the EU, this thesis undertakes a comprehensive study of IP-related merger remedies in two highly innovative sectors: the Pharmaceutical and ICT sectors over a ten year period from 2004 to 2014.
The thesis argues that the EU has relied on market share analysis as a central
component of market analysis in all cases in these sectors, and that this is not the proper approach because existing market share does not reflect market power in the future, nor can it be attributable to innovation. It prefers static efficiency over dynamic efficiency, and thus it is suggested that the EU should consider innovative markets for competition assessment in the merger remedies process. The EU practice is that in most of the cases, the Commission has accepted the divestiture remedies as proposed by the parties. A crucial omission by the Commission approach is to ignore innovation and future markets. The Commission analysis is mainly focussed on existing products, on the basis of market share. It has under-estimated the potential of future markets through innovation. Dynamic competition is crucial in the pharmaceutical sector. Therefore, most of the remedies are catering to the needs of static competition, while ignoring dynamic competition considerations.
This thesis concludes by proposing recommendation that will be guide the EU as well as other competition authorities to identify appropriate and efficient IP related merger remedies and implementation of the same.