Crewless Innovation: A Merger Control Assessment of AI Acqui-Hires Through Shapiro’s Framework

For this session, Carla-Elena Sava (MJur candidate, University of Oxford) will present her MJur dissertation: 'Crewless Innovation: A Merger Control Assessment of AI Acqui-Hires Through Shapiro’s Framework'

Abstract

Over the past two years, the ‘war for talent’ has entered competition law discourse through the rise of acqui-hires. Structured as ‘hire-and-license’ arrangements rather than full acquisitions, this new type of deal has become a recurring feature of AI markets, through which Big Tech firms have managed to absorb the key engineers and founders of several start-ups. The result is that several dynamic rivals have been hollowed out of one of their most valuable assets, namely talent. Despite growing enforcement interest in investigating these strategies, there has so far been no academic engagement on how transactions centred on human capital should be assessed on the merits. This discussion addresses that gap and examines whether acqui-hires could lead to a significant impediment to effective competition under the EU Merger Regulation. Taking a dynamic view centred on innovation and firm capabilities, it considers whether acqui-hires constitute a loss of dynamic competition, a form of ecosystem entrenchment, or, conversely, have a legitimate efficiency rationale for future AI development. Interestingly, Carl Shapiro’s framework for innovation-related mergers, built on the principles of contestability, appropriability, and synergies, is advanced as an acceptable normative test to assess whether acqui-hires are ultimately pro- or anti-competitive.