Big isn't always bad when it comes to tech M&A and innovation.

As the market power of companies such as Alphabet Inc. (GOOGL) - Get Report , Inc. (AMZN) - Get Report and Facebook Inc. (FB) - Get Report  increases, their acquisitions of smaller companies may start to raise red flags for antitrust regulators. A panel of economists and lawyers examined the link between mergers, antitrust reviews and innovation at an NYU Stern School of Business antitrust conference last Friday.

While Facebook and Google are disruptive forces that have shaken up advertising, media and other industries, Stanford University professor Roger Noll suggested the companies are "bureaucratized" organizations that need acquisitions to innovate. 

The prospects of an acquisition by a Silicon Valley power can actually stoke innovation, he suggested, while noting that some mergers are anti-competitive. "The ability for a smart 23-year-old who has a great software idea and can then after 18 months sell it for $50 million to $100 million to Facebook is a plus not a minus for innovation," Noll said. "If we didn't allow that to happen, not a lot of those 23-year-olds would even start their business to begin with."

Facebook's $1-billion purchase of Instagram is in a different price range, but Brattle Group Chairman Michael Cragg suggested that it fits a similar profile. "[Facebook] had, as it turns out, a relatively stagnant population," Cragg said. "One of the reasons it was so interested in buying Instagram is that it was getting a population it didn't have access to."

Aside from a monetary incentive for startups and their early backers, Cragg noted that acquisitions can have other benefits. 

"Ultimately in this space what matters enormously to the innovator is distribution," he said. 

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