Platform Mergers: Lessons from a Case in the Digital TV Market. (26th March 2022)

• Record Type: Journal Article
• Authors: Ivaldi, Marc; Zhang, Jiekai
• Is Part Of: Journal of industrial economics. Volume 70:Number 3(2022)
• Page Start: 591
• Page End: 630
• Publication Date: 2022-03-26
• Subjects: Industrial organization (Economic theory) -- Periodicals; 338
• DOI: 10.1111/joie.12274
• Languages: English
• ISSNs: 0022-1821

Abstract

Abstract : We contribute to the analysis of mergers in two‐sided markets, in which a platform provides its service for free on one side but obtains all its revenues from the other. A structural model allowing for multi‐homing of advertisers is developed to assess a decision of the French competition authority, which approves the merger of the broadcasting services of TV channels but prohibits the merger of their advertising sales services through a behavioral remedy. We show that ignoring the interaction between the two sides of platforms in designing competition or regulatory policy can result in unexpected outcomes.