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Very interesting and extensive independent report done for @CMAgovUK evaluating past merger decisions in the digital sector
bit.ly/2HRfBiD
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bit.ly/2HRfBiD
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Facebook/Instagram problematic: too much weigh put on functionality offered on the users’ side of the market. The Authorities missed the role these functionalities perform in platform’s monetization strategy.
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Google/Waze also problematic: Authorities focussed their theory of harm on the users’ side of the market, omitting to explore how services were monetized: users’ movements behaviour reveals additional information on their preferences, allowing better targeted ads.
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Amazon/The Book Depository and Priceline/Kayak were OK and less controversial. The level of competition in the markets concerned does not seem to have been substantially affected by the mergers.
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Main message: Investigating monetization strategy is important because it can uncover additional anti-competitive effects of the merger. It sheds light on the rationale of the merger as it will make clear how the target brings value to the acquirer.
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Kudos to the authors @tomaso_duso et al, and to @CMAgovUK & @AndreaCoscelli for being so open to ongoing developments in digital markets.
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