The relevance of supply-side substitutability for “Big data”

This paper emphasizes the importance of including supply-side substitution when assessing mergers in data-driven markets. A review of three merger decisions involving big data giants such as Facebook and Google reveals that competition authorities have so far neglected important aspects of data-driven markets such as a simplified supply-side substitutability. Consequently the ability to contest markets which are subject to digitalization has not been evaluated properly. We argue that competition authorities not only need to consider the possibility of supply-side substitution but should also consider the peculiarities of big data if they are to correctly assess competition in data-driven markets.

I. Introduction 1. Over the last ten years data-driven markets have been substantially shaped by a series of mergers that included big data giants such as Facebook and Google. In most of the merger decisions competition authorities have followed a market definition focusing on demand-side substitutability, while supply-side substitutability appears to only have been of limited relevance. In its Facebook/WhatsApp decision the European Commission focused on demand substitutability—concluding that there are important differences between social networks and messaging services for consumers. WhatsApp’s ability to enter the market for social networks was never analysed in detail. 2. The European Commission might have underestimated the potential of WhatsApp to harvest, analyse and process a

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  • Ruhr University (Bochum)
  • Compass Lexecon (Düsseldorf)


Mutlu Özcan, Georg Clemens, The relevance of supply-side substitutability for “Big data”, November 2018, Concurrences N° 4-2018, Art. N° 88128,

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