Magic circle firm Clifford Chance has said it is becoming increasingly difficult to push through mergers in concentrated markets where there are few big players, particularly in the EU.

The firm said that jurisdictions, including the EU, are claiming that innovation could be harmed by mergers in these markets.

In its ‘Antitrust Horizon’ report, which includes a rundown of competition trends, the firm said that of proposed merger deals notified to the European Commission, more than one in 14 were prohibited or agreed subject to remedies. According to the firm, this is the highest level since 2008.

The report said: ‘The EC is increasingly asserting that innovation is likely to be harmed by mergers in relatively concentrated markets. In some instances, concerns have extended to the speculative likelihood that the parties’ sector-wide innovation efforts might overlap in the future, so going beyond an assessment of overlaps between their existing R&D pipelines for specific products.’

The report also noted that 2016 saw a ‘sharp rise’ in political opposition to foreign takeovers. It said this was ‘mainly (but not exclusively) directed at Chinese buyers’.

‘As populism and protectionism increase, governments are bolstering their powers to block foreign takeovers,’ the report said – noting that Japan-based telecoms company SoftBank made a pledge to the UK government that after acquiring chip designer ARM, it would double the number of employees in the UK and keep its headquarters in the UK for at least five years.

The report also noted that there had been a rise in cartel enforcement fines, including fines against Qualcomm and Tetra Pak, and that non-cartel enforcement cases were also on the rise in the healthcare sector.

In the UK, the Competition and Markets Authority is pursuing cases involving the charging of allegedly excessive prices for pharmaceutical products, with large fines imposed in one case and a statement of objections sent in another, the report said.

Thomas Vinje, chair of Clifford Chance’s global antitrust group, said two themes dominated the outlook for businesses: ‘The propagation of new technology and the rise in protectionist rhetoric.

‘The former will bring new antitrust challenges and disputes, while the latter may result in greater political intervention in cross-border deal-making and more disputes over subsidies.’

He added: ‘For antitrust enforcement and merger control, the global trend is towards proliferation and complexity, in terms of both procedure and substance. Sophisticated compliance will be required to achieve and maintain a competitive edge in the coming year.’