Advanced Search
MyIDEAS: Login to save this paper or follow this series

The prohibition of the proposed Springer-ProSiebenSat.1-Merger: how much economics in German merger control?

Contents:

Author Info

  • Budzinski, Oliver
  • Wacker, Katharina

Abstract

We review the Bundeskartellamt (Federal Cartel Office Germany) decision on the proposed merger between Springer and ProSiebenSat.1 from an economic point of view. In doing so, it is not our goal to analyse whether the controversial decision by the Bundeskar-tellamt has been correct or flawed from a legal point of view. Instead, we analyse whether the economic reasoning in the decision document reflects state-of-the-art economic theory on conglomerate mergers. Regarding such types of mergers, anticompetitive effects either do not occur regularly or are more often than not overcompensated by efficiency gains, so that a standard welfare perspective demands reluctance concerning antitrust interventions. This is particularly true if two-sided markets, like media markets, are involved. However, anticompe-titive conglomerate mergers are not impossible, in particular in neighbouring markets where there is some relationship between the products of the merging companies. In line with the more-economic approach in European merger control, a particular thorough line of argumen-tation, backed with particularly convincing economic evidence, is necessary to justify a pro-hibition of a conglomerate merger from an economic point of view. Against this background, we do not find the reasoning of the Bundeskartellamt entirely convincing and sufficiently strong to justify a prohibition of the proposed combination from an economic perspective. The reasons are that (i) the Bundeskartellamt fails to continuously consider consumer and customer welfare as the relevant standards, (ii) positive efficiency and welfare effects of cross-media strategies are neglected, (iii) in contrast, the competition agency sometimes ap-pears to view profitability of post-merger strategy options to be per se anticompetitive (effi-ciency offence), (iv) the incontestability of the relevant markets is not sufficiently substanti-ated, (v) inconsistencies occur regarding the symmetry of the TV advertising market duopoly versus the unique role of the BILD-Zeitung and (vi) the employment of modern economic instruments appears to be underdeveloped. Thus, we conclude that the Bundeskartellamt has not embraced the European more-economic approach in the analysed decision. However, one can discuss whether economic effects are overcompensated in this case by concerns about a reduction in diversity of opinion and threats to free speech. Similar to the Bundeskartellamt, we do not consider these concerns in our analysis. --

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://econstor.eu/bitstream/10419/32114/1/541749552.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Duisburg-Essen, Faculty for Economics and Business Administration in its series IBES Diskussionsbeiträge with number 160.

as in new window
Length:
Date of creation: 2007
Date of revision:
Handle: RePEc:zbw:udewwd:160

Contact details of provider:
Postal: Universitätsstrasse 12, 45117 Essen
Phone: 0201 - 183 3633
Fax: 0201 - 183 2292
Web page: http://www.wiwi.uni-due.de/en/
More information through EDIRC

Related research

Keywords: merger control; media markets; more-economic approach; conglomerate mergers; cross-promotion;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Massimo Motta & Michele Polo, 1997. "Concentration and public policies in the broadcasting industry: the future of television," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 12(25), pages 293-334, October.
  2. Barry Nalebuff, 2000. "Competing Against Bundles," Yale School of Management Working Papers, Yale School of Management ysm157, Yale School of Management.
  3. Martin, Stephen, 1999. "Strategic and welfare implications of bundling," Economics Letters, Elsevier, Elsevier, vol. 62(3), pages 371-376, March.
  4. Ching-To Albert Ma, 1997. "Option Contracts and Vertical Foreclosure," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 6(4), pages 725-753, December.
  5. Jose-Antonio Garcia; Damien Neven, 2005. "The attempted merger between General Electric and Honeywell, a case study of transatlantic conflict," IHEID Working Papers, Economics Section, The Graduate Institute of International Studies 06-2005, Economics Section, The Graduate Institute of International Studies.
  6. Dennis W. Carlton & Michael Waldman, 1998. "The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries," NBER Working Papers 6831, National Bureau of Economic Research, Inc.
  7. Buccirossi Paolo, 2006. "Does Parallel Behavior Provide Some Evidence of Collusion?," Review of Law & Economics, De Gruyter, De Gruyter, vol. 2(1), pages 85-102, July.
  8. Seidmann, Daniel J, 1991. "Bundling as a Facilitating Device: A Reinterpretation of Leverage Theory," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 58(232), pages 491-99, November.
  9. Oliver Budzinski, 2006. "An Economic Perspective on the Jurisdictional Reform of the European Merger Control System," Marburg Working Papers on Economics, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) 200608, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  10. Denicolo, Vincenzo, 2000. "Compatibility and Bundling with Generalist and Specialist Firms," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 48(2), pages 177-88, June.
  11. Carbajo, Jose & de Meza, David & Seidmann, Daniel J, 1990. "A Strategic Motivation for Commodity Bundling," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 38(3), pages 283-98, March.
  12. ANDERSON, Simon P. & GABSZEWICZ, Jean J., 2005. "The media and advertising : a tale of two-sided markets," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2005088, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  13. Ralf Dewenter & Ulrich Kaiser, 2005. "Fusionen auf dem Printmedienmarkt aus wirtschaftspolitischer Sicht," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, DIW Berlin, German Institute for Economic Research, vol. 74(3), pages 51-63.
  14. Church, J. & Gandal, N., 1996. "Systems Competition, Vertical Merger and Foreclosure," Papers, Tel Aviv - the Sackler Institute of Economic Studies 6-96, Tel Aviv - the Sackler Institute of Economic Studies.
  15. Jay Pil Choi, 2004. "Tying and innovation: A dynamic analysis of tying arrangements," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 114(492), pages 83-101, 01.
  16. Bolton, P. & Brodley, J.F. & Riordan, M.H., 1999. "Predatory Pricing: Strategic Theory and Legal Policy," Discussion Paper, Tilburg University, Center for Economic Research 1999-82, Tilburg University, Center for Economic Research.
  17. Chen, Yongmin, 1997. "Equilibrium Product Bundling," The Journal of Business, University of Chicago Press, University of Chicago Press, vol. 70(1), pages 85-103, January.
  18. Oliver Budzinski & Gisela Aigner & Arndt Christiansen, 2006. "The Analysis of Coordinated Effects in EU Merger Control: Where do we stand after Sony/BMG and Impala?," Marburg Working Papers on Economics, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) 200614, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  19. Bum Soo Chon & Junho Choi & George Barnett & James Danowski & Sung-Hee Joo, 2003. "A Structural Analysis of Media Convergence: Cross-Industry Mergers and Acquisitions in the Information Industries," Journal of Media Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 16(3), pages 141-157.
  20. Roson Roberto, 2005. "Two-Sided Markets: A Tentative Survey," Review of Network Economics, De Gruyter, De Gruyter, vol. 4(2), pages 1-19, June.
  21. Franz Jürgen Säcker, 2005. "Fusions- und Kartellerleichterungen für Zeitungsverlage aus wettbewerbsrechtlicher Sicht," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, DIW Berlin, German Institute for Economic Research, vol. 74(3), pages 19-32.
  22. Damien J. Neven, 2006. "Competition economics and antitrust in Europe," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 21(48), pages 741-791, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Budzinski, Oliver, 2012. "Impact evaluation of merger control decisions," Ilmenau Economics Discussion Papers 75, Ilmenau University of Technology, Institute of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:zbw:udewwd:160. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.