Conglomerate mergers in digital ecosystems: EU merger control beyond foreclosure

Abstract

Over the past two decades, large technology firms have evolved into complex digital ecosystems operating across multiple, interconnected markets. This transformation has been driven not only by internal innovation, but also by extensive merger and acquisition activity, much of which has taken the form of conglomerate mergers. Traditionally regarded as largely benign, such transactions pose distinctive competitive risks in digital markets characterised by network effects, economies of scale and scope, data advantages, and user lock-in. This article examines how EU merger control has responded to the expansion of digital ecosystems through conglomerate mergers. It argues that traditional theories of harm—centred on foreclosure and static market power—are often ill-suited to capture the cumulative and dynamic effects of ecosystem expansion. Drawing on social-science conceptions of power, the article shows that digital ecosystems exercise multiple, overlapping forms of economic and political influence that extend beyond price effects. Against this background, the article analyses the European Commission’s enforcement practice, with particular attention to the prohibition of Booking’s acquisition of eTraveli. The decision has been widely characterised in the literature as the first EU prohibition grounded in concerns of ecosystem entrenchment in a digital-adjacent conglomerate setting. The article situates this case within broader debates on killer acquisitions, assimilation strategies, and the limits of current jurisdictional and substantive tools. The article concludes that conglomerate mergers in digital ecosystems should no longer be presumed benign. While such transactions may generate efficiencies, they also risk reinforcing structural features that reduce contestability and innovation. EU merger control must therefore continue to evolve towards a more dynamic, ecosystem-aware framework capable of addressing long-run competitive harm.