LAW & ECONOMICS: TWO-SIDED MARKETS - MERGER - MEDIA - GAME CONSOLES - PAYMENT SYSTEMS - DISTRIBUTION SERVICES - COMPETITIVE ASSESSMENT - TRAVELPORT/WORLDSPAN EC PHASE II CASE

Is merger assessment different in two-sided markets? Lessons from Travelport/Worldspan

The economic theory of two-sided markets has been applied by competition authorities in a number of recent merger cases and is explicitly discussed in the new French merger guidelines. It is often claimed that two-sided markets, which may be found in industries as diverse as media, game consoles, payment systems and distribution services, require a specific competitive assessment and that many of the concepts normally used in merger analysis are not directly applicable to these markets. But how do we establish whether a market is two-sided? And to what extent are the ordinary principles of merger analysis applicable to such markets? In this paper, F. Rosati addresses these questions drawing on experience from the recent EC Phase II merger of Travelport / Worldspan.

* The author advised the merging parties in this case.

On two-sided markets, see also in this Concurrences 2-2008 issue:

- David Evans, Multi-sided platforms : Competition and regulatory policy for multi-sided platforms with applications to the web economy, Concurrences, N° 2-2008

- Benoît Durand, Two-sided markets: Yin and Yang - A review of recent UK mergers, Concurrences, N° 2-2008

Introduction 1. In a number of recent merger cases authorities have applied concepts from the economic theory of “two-sided” markets . Indeed, the new French merger guidelines devote one section to this type of cases . It is often claimed that mergers in such markets require a specific competitive assessment and that many of the concepts normally used in merger analysis are not directly applicable. This claim has potentially far reaching consequences since markets with double-sided features can be found in industries as diverse as media, credit cards, game consoles and computerised reservation systems. But how do we establish whether a market is two-sided? And how does the fact that a market is two-sided change the competitive assessment? In this paper we address these questions

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Francesco Rosati, Is merger assessment different in two-sided markets? Lessons from Travelport/Worldspan, May 2008, Concurrences Review N° 2-2008, Art. N° 16530

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