market forces (often known as For example, the EU considers PC/ monopolies or oligopolies) console to be a separate market preventing companies from from mobile. Software development acquiring excessive market power is also clearly distinct from hardware through mergers and acquisitions development. of rival businesses via the review, What does this mean in practice? modification, approval or blocking In the context of a proposed M&A of transactions deal, if a market only has three major conducting investigations into publishers and two of them propose markets which don’t appear to be to merge, reducing the number from functioning properly. three to two (typically known as a horizontal merger), regulators will Defining the market likely have serious concerns this would reduce competition in the A central aspect for the application publishing market. of competition law will be defining the relevant market being examined. If, however, one of those console The global gaming industry is made publishers acquires a mobile up of multiple sub-segments (eg PC, developer, this should raise fewer console, mobile, VR, cloud) and each concerns as any overlap should be often has multiple levels in a typical limited so competition shouldn’t be value chain (eg game engines, reduced. Similarly, if that publisher is software development, software then acquired by a console hardware publishing, digital storefronts and manufacturer, this should also raise distribution, hardware, data centres). fewer concerns since those parties Defining the market correctly is operate at different parts of the crucial to determining whether value chain (typically known as a participants may have excessive vertical merger). market power and competition may For this reason, challenges to vertical be limited, and in which markets and mergers have historically been rare. parts of the value chain this occurs. However, whether vertical mergers 26