Premium
Platform Mergers: Lessons from a Case in the Digital TV Market *
Author(s) -
Ivaldi Marc,
Zhang Jiekai
Publication year - 2022
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/joie.12274
Subject(s) - competition (biology) , revenue , business , competition policy , two sided market , broadcasting (networking) , industrial organization , advertising , service (business) , marketing , telecommunications , computer science , international trade , network effect , computer security , finance , ecology , european union , biology
We contribute to the analysis of mergers in two‐sided markets, in which a platform provides its service for free on one side but obtains all its revenues from the other. A structural model allowing for multi‐homing of advertisers is developed to assess a decision of the French competition authority, which approves the merger of the broadcasting services of TV channels but prohibits the merger of their advertising sales services through a behavioral remedy. We show that ignoring the interaction between the two sides of platforms in designing competition or regulatory policy can result in unexpected outcomes.