The prohibition of the proposed Springer-ProSiebenSat.1-Merger: how much economics in German merger control?
AbstractWe 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 InfoIf 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.
Bibliographic InfoPaper provided by University of Duisburg-Essen, Faculty for Economics and Business Administration in its series IBES Diskussionsbeiträge with number 160.
Date of creation: 2007
Date of revision:
merger control; media markets; more-economic approach; conglomerate mergers; cross-promotion;
Other versions of this item:
- Oilver Budzinski & Katharina Wacker, 2007. "The Prohibition of the Proposed Springer-ProSiebenSat.1-Merger: How much Economics in German Merger Control?," Marburg Working Papers on Economics 200704, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
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.:
- Damien J. Neven, 2006. "Competition economics and antitrust in Europe," Economic Policy, CEPR & CES & MSH, vol. 21(48), pages 741-791, October.
- Buccirossi Paolo, 2006. "Does Parallel Behavior Provide Some Evidence of Collusion?," Review of Law & Economics, De Gruyter, vol. 2(1), pages 85-102, July.
- Carbajo, Jose & de Meza, David & Seidmann, Daniel J, 1990. "A Strategic Motivation for Commodity Bundling," Journal of Industrial Economics, Wiley Blackwell, vol. 38(3), pages 283-98, March.
- Seidmann, Daniel J, 1991. "Bundling as a Facilitating Device: A Reinterpretation of Leverage Theory," Economica, London School of Economics and Political Science, vol. 58(232), pages 491-99, November.
- Jose-Antonio Garcia; Damien Neven, 2005.
"The attempted merger between General Electric and Honeywell, a case study of transatlantic conflict,"
IHEID Working Papers
06-2005, Economics Section, The Graduate Institute of International Studies.
- Jeremy Grant, Damien Neven, 2005. "The attempted merger between General Electric and Honeywell - A case study of transatlantic conflict," IHEID Working Papers 05-2005, Economics Section, The Graduate Institute of International Studies.
- Stephen Martin, 1998.
"Strategic and Welfare Implications of Bundling,"
CIE Discussion Papers
1998-14, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- Massimo Motta & Michele Polo, 1997. "Concentration and public policies in the broadcasting industry: the future of television," Economic Policy, CEPR & CES & MSH, vol. 12(25), pages 293-334, October.
- Jay Pil Choi, 2004. "Tying and innovation: A dynamic analysis of tying arrangements," Economic Journal, Royal Economic Society, vol. 114(492), pages 83-101, 01.
- Bolton, P. & Brodley, J.F. & Riordan, M.H., 1999. "Predatory Pricing: Strategic Theory and Legal Policy," Discussion Paper 1999-82, Tilburg University, Center for Economic Research.
- Anderson, Simon P & Gabszewicz, Jean Jaskold, 2005.
"The Media and Advertising: A Tale of Two-Sided Markets,"
CEPR Discussion Papers
5223, C.E.P.R. Discussion Papers.
- Anderson, Simon P. & Gabszewicz, Jean J., 2006. "The Media and Advertising: A Tale of Two-Sided Markets," Handbook of the Economics of Art and Culture, Elsevier.
- ANDERSON, Simon P. & GABSZEWICZ, Jean J., . "The media and advertising: a tale of two-sidedmarkets," CORE Discussion Papers RP -1888, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Simon P., ANDERSON & Jean J., GABSZEWICZ, 2005. "The media and advertising : a table of two-sided markets," Discussion Papers (ECON - DÃ©partement des Sciences Economiques) 2005060, Université catholique de Louvain, Département des Sciences Economiques.
- ANDERSON, Simon P. & GABSZEWICZ, Jean J., 2005. "The media and advertising : a tale of two-sided markets," CORE Discussion Papers 2005088, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Ching-to Albert Ma, 1995.
"Option Contracts and Vertical Foreclosure,"
0061, Boston University - Industry Studies Programme.
- Jeffrey Church & Neil Gandal, 2000.
"Systems Competition, Vertical Merger, and Foreclosure,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 9(1), pages 25-51, 03.
- Church, J. & Gandal, N., 1996. "Systems Competition, Vertical Merger and Foreclosure," Papers 6-96, Tel Aviv - the Sackler Institute of Economic Studies.
- 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
200614, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- Aigner, Gisela & Budzinski, Oliver & Christiansen, Arndt, 2007. "The analysis of coordinated effects in EU merger control: where do we stand after Sony/BMG and Impala?," IBES DiskussionsbeitrÃ¤ge 156, University of Duisburg-Essen, Faculty for Economics and Business Administration.
- Barry Nalebuff, 2000. "Competing Against Bundles," Yale School of Management Working Papers ysm157, Yale School of Management.
- Chen, Yongmin, 1997. "Equilibrium Product Bundling," The Journal of Business, University of Chicago Press, vol. 70(1), pages 85-103, January.
- 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, vol. 74(3), pages 51-63.
- 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.
- Dennis W. Carlton & Michael Waldman, 2002. "The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 194-220, Summer.
- Dennis W. Carlton & Michael Waldman, 1998. "The Strategic Use Of Tying To Preserve And Create Market Power In Evolving Industries," University of Chicago - George G. Stigler Center for Study of Economy and State 145, Chicago - Center for Study of Economy and State.
- Roson Roberto, 2005. "Two-Sided Markets: A Tentative Survey," Review of Network Economics, De Gruyter, vol. 4(2), pages 1-19, June.
- 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 and Francis Journals, vol. 16(3), pages 141-157.
- Denicolo, Vincenzo, 2000. "Compatibility and Bundling with Generalist and Specialist Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 48(2), pages 177-88, June.
- 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, vol. 74(3), pages 19-32.
- Oliver Budzinski, 2006. "An Economic Perspective on the Jurisdictional Reform of the European Merger Control System," Marburg Working Papers on Economics 200608, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- Budzinski, Oliver, 2012. "Impact evaluation of merger control decisions," Ilmenau Economics Discussion Papers 75, Ilmenau University of Technology, Institute of Economics.
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 references are entirely missing, you can add them using this form.