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Merger Control on Two-Sided Markets: Is There Need for an Efficiency Defense?
Working paper

Merger Control on Two-Sided Markets: Is There Need for an Efficiency Defense?

Edmond Baranes, Thomas Cortade and Andreea Cosnita-Langlais

Abstract

horizontal merger merger control cost savings two-sided markets L - Industrial Organization/L.L4 - Antitrust Issues and Policies/L.L4.L41 - Monopolization • Horizontal Anticompetitive Practices D - Microeconomics/D.D8 - Information, Knowledge, and Uncertainty/D.D8.D82 - Asymmetric and Private Information • Mechanism Design K - Law and Economics/K.K2 - Regulation and Business Law/K.K2.K21 - Antitrust Law
We study horizontal mergers on two-sided markets between horizontally differentiated platforms. We provide a theoretical analysis of the merger’s price effect based on the amount of cost savings it generates, the behavior of outsider platforms, and the size of cross-group network effects. We point out differences as compared with the standard, one-sided merger analysis, and also discuss the merger control policy implications.
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