Taxation & Antitrust: The Arm's Lenght Principle Regulation in a Digital Business Restructuring

There are endless economic phenomena that find regulatory convergence both in tax law and in competition law. Regulation of the principle of full competition in business restructuring can be considered a classic example of what has just been mentioned. In particular, the merger has as its main objective the reduction of costs and the maximization of profit through the improvement of business synergies. However, when the purpose of a merger is distorted, we have identified two fundamental problems which concern the above legal branches: where the business is combined for the new entity to benefit from a series of tax benefits or to transfer its benefit to low-tax jurisdictions, National and international tax law has provided instruments to determine whether the reason for the merger is economically valid. We have concretized our theoretical analysis of this first part in the study of the merger by absorption of Mediaset España Comunicación, S.A., as a company absorbed, by MFE-MEDIAFOREUROPE N.V that entered into force on 3 May 2023. On the other hand, at a time when the merger aims to acquire an innovative competitor with the sole aim of truncating the development of innovations and avoiding future competition, Antitrust regulators of the Jurisdictions can intervene in the free will of the parties and disallow the merger in favor of the final consumer. The phenomenon described above is known by experts in the field as "Killer Acquisitions". In this sense, we turn our thoughts to the analysis of the attempted merger of Illumnia, Inc and Pacific Biosciences of California, Inc and the merger between Paypal Holdings and iZettle AB.