Mergers: Commission clears acquisition of Photomath by Google

This article is brought to you in association with the European Commission.

The European Commission has approved unconditionally, under the EU Merger Regulation, the proposed acquisition of Photomath, Inc. (‘Photomath’) by Google LLC (‘Google’). The Commission concluded that the transaction would raise no competition concerns in the European Economic Area (‘EEA’).

Google is a technology company active in a wide range of product areas, including online search, app store services and several online homework and study help tools. Photomath owns an online homework and study help app that uses a smartphone’s camera to scan and solve maths problems.

The Commission’s investigation

Based on its market investigation, the Commission found that the transaction would not significantly reduce competition in the markets for: (i) online homework and study help tools that include maths as a subject offering and (ii) general search services.

During its investigation, the Commission examined:

• The overlap between the companies’ activities in online homework and study help tools that include a maths offering. The Commission found that the parties’ combined market shares are limited and there are many alternative players.
• Thepotential strengthening of Google’s position in general search services. The Commission found that the integration of Photomath into Google’s general search service would not strengthen Google’s position in this market. Maths search queries represent only a very small share of all general search queries and Photomath’s technical capabilities are not unique or scarce.
• The relationship between Google’s general search services and Photomath’s online homework and study help tool that includes a maths offering. The Commission found that access to Google’s search engine is not of significant importance to gain new users for maths tools. Competitors also acquire new users through other channels, such as recommendations by friends and teachers, social media and advertising campaigns.
• The vertical link between Google’s Android app store and Photomath’s online homework and study help tool that includes a maths offering. The Commission similarly found that competing maths tools do not depend on access to Google’s in-app-store search to gain new users, and that competitors also acquire new users through other channels.

The Commission therefore concluded that the proposed transaction would raise no competition concerns in the EEA and cleared the case unconditionally.

Companies and Products

Google, wholly owned by Alphabet Inc. and headquartered in the US, operates an online search engine offered to end users free of charge. It also provides operating systems for mobile devices, software and hardware, including an Android app store. Google also operates across a number of other sectors including online advertising and cloud computing. Google offers a range of education products and digital literacy tools such as its multiple-subject homework app Socratic.

Photomath, headquartered in the US, provides free and premium versions of an online homework and study help maths app that utilises a smartphone’s camera to scan and solve ‘symbolic maths’ problems. These include pre-algebra through to calculus problems that use mathematical notation to represent a mathematical idea or relationship between two ideas, such as roots, quotients, indices or powers. Photomath provides users with step-by-step explanations to solve maths problems.

Merger control and procedure

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

More information will be available on the Commission’s competition website, in the Commission’s public case register under the case number M.10796.