Understanding the new frontier for merger control and innovation: the European Commission’s decision in Dow/DuPont

The European Commission has published its decision in the merger between Dow and Dupont, two global crop protection businesses. While the Commission ultimately cleared the merger, it was concerned that the combination would reduce innovation competition, requiring the companies to divest one party’s global research and development (R&D) facilities. Ben Forbes, Mat Hughes, and Rameet Sangha consider this new frontier for merger control in a chapter for The International Comparative Legal Guide to: Merger Control 2018.

At a glance

• Dow/DuPont marked the first time the Commission imposed a remedy requiring that one party divest its global R&D facilities to address concerns that the merger would reduce wide-ranging innovation competition.
• We review the economic literature on the drivers of innovation and the link between mergers and innovation incentives.
• Advisors need to stay alive to the possibility that the Commission will closely examine innovation competition in future cases, and we focus on the evidence that appeared decisive for the Commission’s case.