LAW & ECONOMICS : TWO-SIDED MARKETS - UK MERGER CASES

Two-sided markets : Yin and Yang, a review of recent UK mergers

Economic literature is warning us that applying a one-sided market logic in two sided markets is bound to generate some errors when assessing the extent of competition between firms. This article reviews some recent UK merger decisions in two-sided market industries and found that in all instances a one sided-market logic was applied. Is this cause for concern ? This article provides some elements that shed light on this question*.

* The views expressed in this article are those of the author and do not represent an official views of the UK Competition Commission.

On two-sided markets, see :

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

- F. Rosati, Is merger assessment different in two-sided markets? Lessons from the Travelport/Worldspan.

1. The recent and fast-growing literature on the economics of two sided markets has started to reveal important implications for competition policy. In particular, a consensus is emerging : applying conventional wisdom to two-sided markets is bound to generate erroneous competitive assessment. 2. This article focuses on merger control in two-sided markets. The article reviews a selected sample of recent merger investigations in the UK that took place in industries where two-sided market features are present. In some cases, the competition agency only looked at one side of the market, while in others it examined the effect of the merger on the two sides of the market. But in all instances, a one-sided economic logic was applied. Could this cause for concern ? 3. In the first section,

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Auteur

  • RBB Economics (Brussels)

Citation

Benoît Durand, Two-sided markets : Yin and Yang, a review of recent UK mergers, mai 2008, Concurrences N° 2-2008, Art. N° 17429, www.concurrences.com

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