Part IV What are the Risks if Competition Authorities Ignore or Downplay Big Data?, 15 Risk of Inadequate Merger Enforcement

Subject(s):

Market power — Rights — Internet — Technology — National merger control

This chapter identifies four significant risks in the ways competition agencies have analysed data-driven mergers, and how they have not fully considered the implications of a data-driven economy. First, it is questionable whether competition agencies are accurately predicting the competitive effects of mergers in concentrated markets. The second risk is when competition agencies consider only the merger’s impact on the ‘paid’ side of multi-sided platforms and ignore the free side. To illustrate, the chapter uses the wave of US commercial radio station mergers from the 1990s to the 2000s, where the Department of Justice considered in its consent decrees only the mergers’ effect on advertising, and not on listenership. The third risk is that, even if the agency reviews the merger’s likely effect on each side of the multi-sided platform, its price-centric tools are ill suited for evaluating the free side. The network effects can magnify the likely consumer harm—the fourth risk.