A “Whack-a-mole monopolization machine”? “Ecosystem” theories in digital platform mergers
Live Webcast with Annabelle Gawer (University of Surrey and University of Oxford), Mike Walker (Competition and Markets Authority and RPN Member), John Newman (Miami School of Law and Federal Trade Commission), Patrick Rey (Toulouse School of Economics, CEPR and RPN Member), Hans Zenger (European Commission) and Feng Zhu (Harvard Business School). Tommaso Valletti (Imperial College London, and Director, CEPR Competition RPN) introduced the event and Cristina Caffarra (Keystone, RPN Co-Founder and Steering Committee Member) acted as Chair.
A high-profile issue that has emerged recently is how to deal with acquisitions by digital platforms that do not fit the standard horizonal/vertical structure. Agencies are faced with acquisitions where the target is in an adjacent market, and are thinking about how to develop “theories of harm” around a platform with significant presence in multiple adjacent spaces. Can this contribute to an “ecosystem effect” powering up the impact of a given acquisition beyond traditional mechanisms? The issue for enforcers is how to make these theories actionable and credible? The question for economists is how to bring some clarity on the mechanisms of concern? What should regulators rely on to identify if there is a problem in a particular case?