Digital Conglomerates and EU Competition Policy

Streel, Alexandre de

doi:10.2139/ssrn.3350512

Cited by 41 publications

(27 citation statements)

References 64 publications

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“…In a laissez-faire setting without policy interventions, the incumbent can acquire the entrant once the innovation outcomes become common knowledge. We assume that an acquisition takes place if and only if it 6 See for instance Bourreau and de Streel (2019), Crémer et al (2019), Furman et al (2019) and, most recently, Cabral (2020). It should be noted that the prospect of buying an innovative entrant could have a negative effect on the incumbent's incentives to innovate, since the incumbent can protect her monopoly by acquiring the entrant.…”

Section: Introductionmentioning

confidence: 99%

Killer Acquisitions and Beyond: Policy Effects on Innovation Strategies

2020

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This paper provides a theory of strategic innovation project choice by incumbents and start-ups. We show that prohibiting killer acquisitions strictly reduces the variety of innovation projects. By contrast, we find that prohibiting other acquisitions only has a weakly negative innovation effect, and we provide conditions under which the effect is zero. Furthermore, for both killer and other acquisitions, we identify market conditions under which the innovation effect is small, so that prohibiting acquisitions to enhance competition would be justified.

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Section: Introductionmentioning

confidence: 99%

Killer Acquisitions and Beyond: Policy Effects on Innovation Strategies

2020

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“…The second contribution concerns competition policy. The regulation of digital markets poses many challenges for antitrust authorities (Cremer et al (2019)) and there is a need to better understand the multimarket strategies of tech giants (Bourreau and De Streel (2019)). Our results imply that antitrust authorities that have to review mergers & acquisitions of digital platforms operating in distinct markets should first examine who is likely to benefit from cross-market externalities after platform integration.…”

Section: Discussionmentioning

confidence: 99%

“…Their expansion relies on internal and external (mergers & acquisitions) growth strategies that strengthen their position in their core markets. They have also achieved a high level of diversification, not only by penetrating complementary markets, but also unrelated markets (Bourreau and De Streel (2019)). For instance, while the initial market of Google is search engines, it has also diversified into operating systems, video/music streaming services, cloud services, voice assistance, etc.…”

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confidence: 99%

Multimarket Contact and Platform Competition: Reassessing the Mutual Forbearance Hypothesis

Darmon

Texier

et al. 2019

SSRN Journal

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Antitrust authorities are particularly concerned with the dominant market position of tech giants such as Google, Facebook, and Amazon. These digital conglomerates are characterized by platform-based business models. However, despite their dominance, they are competing with each other to attract the same groups of users (developers, advertisers, end users, third party sellers, etc). They therefore have not only overlapping users (or sides) but also multimarket contact (MMC). In traditional one-sided markets, theory and empirical evidence show that MMC tends to relax competition. However, it is unclear whether this result holds under platform competition. This paper examines how MMC affects pricing behaviour and profits of two-sided platforms. We develop a model of platform competition with two distinct markets. We assume that platforms only charge one group of users and provide free access to the other group. We argue that multimarket platforms also generate cross-market externalities that favour their users, in addition to well-known cross-group externalities. We find that when cross-market externalities benefit the side that has free access, price competition is fiercer and total welfare increases under MMC. However, when they benefit the side that pays to access the platform, the same result only holds if the cross-group externality and/or cross-market externality are sufficiently high. Finally, we show that a single-market platform competing with a multimarket platform may be deterred from entering the second market if cross-market or cross-group externalities are high. Our findings contrast with the mutual forbearance hypothesis which claims that MMC relaxes competition in traditional (one-sided) industries. From a competition policy perspective, our paper provides an insight into how antitrust authorities should review conglomerate mergers and assess the effects of diversification strategies of digital platforms.

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“…The majority of public policy initiatives to address platform power approach the issue from a competition regulation (antitrust) angle (e.g., Bourreau & de Streel, 2019; DG Comp, 2019). But a common observation is that the existing tools and concepts of competition law may not be well suited to the task (Lynskey, 2017).…”

Section: Contributionsmentioning

confidence: 99%

The Internet and public policy: Future directions

et al. 2021

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In January 2021, the editorial team of Policy & Internet changed from the Oxford Internet Institute to the Department of Media and Communications at the University of Sydney. This article invites all the past and current editors to contribute to the future directions and discussion of internet and public policy. It is collection of six contributions covering the trajectory of the internet policy research agenda, platform power in the digital economy, algorithms and the need for transparency, media diversity and platform regulation, speech in the age of content moderation and age‐gating the internet. The collection of essays highlights the past 10 years of the journal and paints a clear trajectory for the next era of Policy & Internet.

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Digital Conglomerates and EU Competition Policy

Cited by 41 publications

References 64 publications

Killer Acquisitions and Beyond: Policy Effects on Innovation Strategies

Killer Acquisitions and Beyond: Policy Effects on Innovation Strategies

Multimarket Contact and Platform Competition: Reassessing the Mutual Forbearance Hypothesis

The Internet and public policy: Future directions

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