IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2022-02-3.html

Google and Alibaba s Different Stock Performances after Antitrust Investigations, the Reasons and Enlightenment

Author

Listed:
  • Cong Gu

    (School of Economics and Management, University of Chinese Academy of Sciences, China.)

  • Benfu Lv

    (School of Economics and Management, University of Chinese Academy of Sciences, China.)

  • Geng Peng

    (School of Economics and Management, University of Chinese Academy of Sciences, China)

Abstract

Platform monopoly has attracted wide attention from politicians and the public.. The European Commission has made unremitting efforts in platform antitrust enforcement in the last decade, but together with antitrust investigations, the stock prices of platform giants like Google and Facebook keep breaking their highest points. At the end of 2020, the Chinese government also started antitrust investigations towards platform companies like Alibaba. In contrast, the stock price of Alibaba crashed and lost more than half of its market value. By analyzing their CAR, we proved that the stock performance of Alibaba is significantly worse than Google after their most serious antitrust investigations. The difference reflects investors' different expectations of the European Commission and China's antitrust enforcement. A noteworthy problem then comes out: while the Chinese government is seriously strengthening platform antitrust and putting forward reforms in platform regulation, is there any authority that is able to effectively regulate the international platform giants and maximize the welfare of their users worldwide?

Suggested Citation

  • Cong Gu & Benfu Lv & Geng Peng, 2022. "Google and Alibaba s Different Stock Performances after Antitrust Investigations, the Reasons and Enlightenment," International Journal of Economics and Financial Issues, International Journal of Economics and Financial Issues, vol. 12(2), pages 26-36, March.
    • Handle: RePEc:eco:journ1:2022-02-3
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijefi/article/download/12763/6649
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijefi/article/view/12763
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thomas M. Lenard, 2019. "Introduction to the RIO Special Issue on Antitrust and the Platform Economy," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 54(4), pages 617-626, June.
    2. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, September.
    3. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
    4. Edward Iacobucci & Francesco Ducci, 2019. "The Google search case in Europe: tying and the single monopoly profit theorem in two-sided markets," European Journal of Law and Economics, Springer, vol. 47(1), pages 15-42, February.
    5. Caillaud, Bernard & Jullien, Bruno, 2003. "Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-328, Summer.
    6. Justus Haucap & Ulrich Heimeshoff, 2014. "Google, Facebook, Amazon, eBay: Is the Internet driving competition or market monopolization?," International Economics and Economic Policy, Springer, vol. 11(1), pages 49-61, February.
    7. Lingling Zhang & Doug J. Chung, 2020. "Price Bargaining and Competition in Online Platforms: An Empirical Analysis of the Daily Deal Market," Marketing Science, INFORMS, vol. 39(4), pages 687-706, July.
    8. Robert H. Bork & J. Gregory Sidak, 2012. "What Does The Chicago School Teach About Internet Search And The Antitrust Treatment Of Google?," Journal of Competition Law and Economics, Oxford University Press, vol. 8(4), pages 663-700.
    9. Oakland, William H., 1987. "Theory of public goods," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 9, pages 485-535, Elsevier.
    10. Distaso, Walter & Lupi, Paolo & Manenti, Fabio M., 2006. "Platform competition and broadband uptake: Theory and empirical evidence from the European union," Information Economics and Policy, Elsevier, vol. 18(1), pages 87-106, March.
    11. Farida F. Galimulina & Alexey I. Shinkevich & Irina P. Komissarova & Albina N. Mayorova & Irina A. Astafyeva & Natalia V. Klimova & Karina R. Nabiullina & Irina V. Zhukovskaya, 2016. "Technology Platforms as an Efficient Tool to Modernize Russia's Economy," International Journal of Economics and Financial Issues, International Journal of Economics and Financial Issues, vol. 6(1), pages 163-168.
    12. Bruno Jullien, 2005. "Two-sided Markets and Electronic Intermediaries," CESifo Economic Studies, CESifo Group, vol. 51(2-3), pages 233-260.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Justus Haucap & Torben Stühmeier, 2016. "Competition and antitrust in Internet markets," Chapters, in: Johannes M. Bauer & Michael Latzer (ed.), Handbook on the Economics of the Internet, chapter 9, pages 183-210, Edward Elgar Publishing.
    2. Justus Haucap & Ulrich Heimeshoff, 2014. "Google, Facebook, Amazon, eBay: Is the Internet driving competition or market monopolization?," International Economics and Economic Policy, Springer, vol. 11(1), pages 49-61, February.
    3. Paul Belleflamme & Eric Toulemonde, 2009. "Negative Intra-Group Externalities In Two-Sided Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 245-272, February.
    4. Martin Peitz, 2006. "Marktplätze und indirekte Netzwerkeffekte," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(3), pages 317-333, August.
    5. Bertschek, Irene & Briglauer, Wolfgang & Hüschelrath, Kai & Krämer, Jan & Frübing, Stefan & Kesler, Reinhold & Saam, Marianne, 2016. "Metastudie zum Fachdialog Ordnungsrahmen für die Digitale Wirtschaft: Im Auftrag des Bundesministeriums für Wirtschaft und Energie (BMWi)," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 147040.
    6. Budzinski, Oliver, 2021. "Wettbewerbsordnung und digitale Medienmärkte," Ilmenau Economics Discussion Papers 153, Ilmenau University of Technology, Institute of Economics.
    7. Amelio, Andrea & Jullien, Bruno, 2012. "Tying and freebies in two-sided markets," International Journal of Industrial Organization, Elsevier, vol. 30(5), pages 436-446.
    8. Budzinski, Oliver, 2016. "Aktuelle Herausforderungen der Wettbewerbspolitik durch Marktplätze im Internet," Ilmenau Economics Discussion Papers 103, Ilmenau University of Technology, Institute of Economics.
    9. Stöhr, Annika & Budzinski, Oliver & Schmid, Jessica, 2024. "Zur Regulierung des ökonomischen Wettbewerbs auf Medienmärkten: Eine Einführung und Übersicht," Ilmenau Economics Discussion Papers 191, Ilmenau University of Technology, Institute of Economics.
    10. Haucap, Justus & Heimeshoff, Ulrich, 2017. "Ordnungspolitik in der digitalen Welt," DICE Ordnungspolitische Perspektiven 90, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    11. Moraga-Gonzalez, Jose L. & Wildenbeest, Matthijs R., 2011. "Comparison sites," IESE Research Papers D/933, IESE Business School.
      • Jose Luis Moraga-Gonzalez & Matthijs R. Wildenbeest, 2011. "Comparison Sites," Working Papers 2011-04, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    12. Chen, Ying-Ju & Zenou, Yves & Zhou, Junjie, 2022. "The impact of network topology and market structure on pricing," Journal of Economic Theory, Elsevier, vol. 204(C).
    13. Amit Kumar Bardhan & Saad Ashraf, 2024. "More buyers or more sellers: on marketing resource allocation strategies of competing two-sided platforms," Electronic Commerce Research, Springer, vol. 24(4), pages 2579-2608, December.
    14. Xin Zhang & Lihong Cheng & Yugang Yu & Yong Tan, 2025. "To Partner or Not to Partner? The Partnership Between Platforms and Data Brokers in Two-Sided Markets," Information Systems Research, INFORMS, vol. 36(3), pages 1437-1460, September.
    15. Jonathan Levin, 2011. "The Economics of Internet Markets," Discussion Papers 10-018, Stanford Institute for Economic Policy Research.
    16. Jorge Arenas M., 2024. "Market Size in Pricing Problems on Multi-sided Matching Platforms," Working Papers Central Bank of Chile 1033, Central Bank of Chile.
    17. Carrillo, Juan D. & Tan, Guofu, 2021. "Platform competition with complementary products," International Journal of Industrial Organization, Elsevier, vol. 77(C).
    18. Charles Angelucci & Julia Cagé & Michael Sinkinson, 2024. "Media Competition and News Diets," American Economic Journal: Microeconomics, American Economic Association, vol. 16(2), pages 62-102, May.
    19. Jullien, Bruno & Sand-Zantman, Wilfried, 2021. "The Economics of Platforms: A Theory Guide for Competition Policy," Information Economics and Policy, Elsevier, vol. 54(C).
    20. Jabbour, Chady & Rey-Valette, Hélène & Maurel, Pierre & Salles, Jean-Michel, 2019. "Spatial data infrastructure management: A two-sided market approach for strategic reflections," International Journal of Information Management, Elsevier, vol. 45(C), pages 69-82.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2022-02-3. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Monica Sinhat (email available below). General contact details of provider: https://econjournals.com/index.php/ijefi .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.