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

DROIT ET ECONOMIE : MARCHES BIFACES - CONCENTRATIONS - ANALYSE CONCURRENTIELLE - MEDIAS - SYSTEMES DE PAIEMENT - SERVICES DE DISTRIBUTION - AFFAIRE TRAVELPORT/WORLDSPAN

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° 16529

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