Global antitrust agenda for 2022

The role of competition law, consumer protection and sector regulation in driving economic growth while delivering on broader public policy objectives is high on the political agenda. Companies operating across borders are experiencing a wave of regulatory developments, driven largely by geopolitics, issues raised by digitisation, and changing consumer and societal expectations - a trend which has been accelerated by the pandemic. 

Expansive antitrust

Governments and regulators are intervening more actively in markets to promote a wider set of goals – from fairer and greener societies to more resilient domestic industries – while continuing to encourage competition, innovation, productivity and growth. These dynamics are already shaping competition laws and policies as authorities around the world take a more active approach towards enforcement and governments enact new laws to address these concerns. The impact of these drivers on the types of conduct and acquisitions that are likely to be investigated (and possibly prohibited or sanctioned) should be high on boardroom agendas in 2022.

Tech in the crosshairs

In the US, president Biden has made assertive antitrust enforcement a priority of his administration, appointing progressive leaders to the federal agencies and calling for antitrust laws to be enforced with ‘vigour’. It is little surprise therefore that US tech finds itself squarely in the antitrust spotlight.

The same is true beyond the US, with the EU, the Competition and Markets Authority, Germany’s Bundeskartellamt and the Chinese State Administration for Market Regulation all having introduced (or planning to introduce) new powers to regulate digital businesses. A complex interplay of competition, IP, data and consumer laws are being deployed to achieve a wide range of objectives, from tackling misinformation to keeping personal data safe.

Industries in transformation

As companies venture beyond core competencies and expand into new spaces, the technological transformation, in particular of financial services, manufacturing and energy, is similarly in focus as the competition and consumer protection lens is turned on companies’ collaboration arrangements, data ownership practices and use of government financing. Many of these businesses also face new regulatory hurdles as they adapt to support carbon reduction goals. As transforming businesses reinvent themselves – whether organically, by collaborating or mergers and acquisitions – they face new and often complex competition law risks that will need to be managed across their business and investment strategies.

Focus on life sciences and other innovative sectors

Competition law is also being employed as a tool to promote innovation, with authorities pushing the established bounds of substantive assessments to new complex theories of harm as they investigate whether deals and collaborations are stifling creativity. This trend of intense scrutiny is most keenly felt in innovative industries such as life sciences, digital and tech, as regulators navigate a fine line between intervention and the encouragement of innovation and investment.

Evolution of merger review

These dynamics are also reshaping merger review. We are seeing heightened scrutiny of certain deals and sectors, and growing scepticism that mergers are beneficial (or at least neutral) to competition.

At the same time, there has been a proliferation of investment screening regimes globally. Governments are strengthening their powers to scrutinise investments on national security grounds. This year has already seen the National Security and Investment Act come into force in the UK, while governments across the world are paying greater attention to investments in dual-use and emerging technologies deemed critical to both military and economic strength. Foreign investment review is now firmly embedded in M&A deal planning.

Taken together, these forces are combining to create a much less predictable M&A environment where deals take longer to close. This is in turn driving dealmakers to litigate against both procedural and substantive decisions by regulators.

Climate change

Finally, the past 12 months have seen unprecedented international attention on climate change, from the UN’s ‘code red for humanity’ report to the Cop26 climate conference in Glasgow. As governments remain focused on finding ways for competition and consumer protection laws to support net-zero objectives, competition law will continue to play a critical role. Authorities will have to think hard about whether current competition and consumer enforcement concepts should be flexed to address these ongoing environmental challenges.

Freshfields’ recent report Global antitrust in 2022 explores these themes and others, such as the growing recognition of competition law’s role in labour markets. This includes compliance and whistleblowing, and the optimisation and resilience of supply chains as new subsidy control, trade law developments and changing competition rules take effect; together with more traditional competition concepts such as the evolution of cartel enforcement and consumer compensation.

Against the backdrop of such dynamics, one thing is certain: the competition law landscape is evolving and 2022 will see a plethora of new challenges which businesses and their advisers need to anticipate and factor into their risk management, compliance programmes and M&A planning.

Counsel Sarah Jensen and senior knowledge lawyer Karen Slaney are members of the antitrust, competition and trade practice at Freshfields Bruckhaus Deringer