Working Paper: CEPR ID: DP14353
Authors: Massimo Motta; Martin Peitz
Abstract: Big tech mergers are frequently occurring events. What are the competitive effectsof these mergers? With the help of a simple model we identify the acquisition ofpotential competitors as a pressing issue for merger control in digital industries. Wealso sketch a few novel theories of harm of horizontal and conglomerate mergersthat are potentially relevant in digital industries. Finally, we draw some policyrecommendations on how to deal with mergers in such industries.
Keywords: acquisitions; antitrust; digital markets; competition policy; platforms
JEL Codes: L41; L13; K21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Acquisition of potential competitors (G34) | Anti-competitive effects (L41) |
| Acquisition of potential competitors (G34) | Reduction of consumer surplus (D11) |
| Killer acquisition (G34) | Lower consumer welfare (D11) |
| Merger may be pro-competitive (L41) | Development of project without merger (O36) |
| Acquisition leads to increased consumer surplus (D16) | Development of previously shelved projects (O22) |
| Conglomerate mergers (G34) | Anti-competitive effects (L41) |
| Bundling of services (L87) | Disadvantage more efficient competitors (D43) |