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Competition

Vertical mergers in the technology, media and telecom sector

 

Vertical mergers are increasingly becoming a focus of attention in the antitrust sphere, due to a number of recent concentration operations among large vertically related companies in the technology, media and telecom industries. While traditionally presumed as pro-competitive, vertical mergers may sometimes pose indirect harm to competition, with common theories of harm including exclusionary strategies through input and customer foreclosure, attempts to leverage market power via price discrimination and facilitation of tacit co-ordination. These competition concerns are often counter balanced by important efficiency effects, which include the elimination of the double-marginalisation problem, reduction of transaction costs, and creation of incentives for investment and innovation.

In June 2019, the OECD Competition Committee discussed how competition authorities can effectively use merger control to reduce the risk of competition harm posed by potentially problematic vertical mergers, without compromising the many efficiencies typically associated with vertical integration. Building on the 2007 OECD work on the same topic, the background note revisits the assessment of vertical mergers in light of recent developments in economic theory and the new insights brought by recent merger cases.

 

SEE ALSO

OECD Handbook on Competition Policy in the Digital Age

Best Practice Competition Roundtables  

See a video with Professor Margaret Slade shares her insights on the welfare effects of vertical mergers

INVITED SPEAKERS

Margaret SLADE  Bio
Professor emeritus at the Vancouver School of Economics at the University of British Columbia, Canada

Carl SHAPIRO  Bio
Professor at the Haas School of Business and the Department of Economics at the University of California at Berkeley, USA

Christopher YOO Bio
Professor of Law, Communication, and Computer and Information Science at the University of Pennsylvania Law School, USA

Luisa AFFUSO  
Chief Economist at the UK communications regulator Ofcom, UK

 

DOCUMENTS

» OECD Background Note | FR

» Executive Summary with key findings | FR

» Detailed Summary of the Discussion | FR

Implications of e-Commerce for Competition Policy, 2018

Vertical Integration and Mergers: Empirical Evidence and Evaluation Methods by Margaret Slade

Testing vertical mergers for input foreclosure by Carl Shapiro


CONTRIBUTIONS

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BIAC

 

PRESENTATIONS

 

RELATED BEST PRACTICE ROUNDTABLES

Implications of e-Commerce for Competition Policy, 2018

Vertical Mergers, 2007

Media Mergers, 2003

Competition and Regulation Issues in Telecommunications, 2001

RELATED TOPICS

Mergers

OECD best practice roundtables on competition

More OECD work on competition

 

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