The prohibition of the proposed Springer-ProSiebenSat.1-Merger: how much economics in German merger control?
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.
|Date of creation:||2007|
|Date of revision:|
|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
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.:
- Ching-to Albert Ma, 1995.
"Option Contracts and Vertical Foreclosure,"
0061, Boston University - Industry Studies Programme.
- Jean Tirole, 2005. "The Analysis of Tying Cases: A Primer," CPI Journal, Competition Policy International, vol. 1.
- 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?,"
156, University of Duisburg-Essen, Institute of Business and Economic Studie (IBES).
- 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).
- 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.
- 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," NBER Working Papers 6831, National Bureau of Economic Research, Inc.
- 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.
- Simon P., ANDERSON & Jean J., GABSZEWICZ, 2005.
"The media and advertising : a table of two-sided markets,"
Discussion Papers (ECON - Département des Sciences Economiques)
2005060, Université catholique de Louvain, Département des Sciences Economiques.
- 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., 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).
- 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).
- 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.
- 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.
- Buccirossi Paolo, 2006. "Does Parallel Behavior Provide Some Evidence of Collusion?," Review of Law & Economics, De Gruyter, vol. 2(1), pages 85-102, July.
- 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.
- 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.
- Barry Nalebuff, 2000. "Competing Against Bundles," Yale School of Management Working Papers ysm157, Yale School of Management.
- 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.
- Chen, Yongmin, 1997. "Equilibrium Product Bundling," The Journal of Business, University of Chicago Press, vol. 70(1), pages 85-103, January.
- Damien J. Neven, 2006. "Competition economics and antitrust in Europe," Economic Policy, CEPR;CES;MSH, vol. 21(48), pages 741-791, October.
- Stephen Martin, 1998.
"Strategic and Welfare Implications of Bundling,"
CIE Discussion Papers
1998-14, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- 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.
- Denicolo, Vincenzo, 2000. "Compatibility and Bundling with Generalist and Specialist Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 48(2), pages 177-88, 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 & Francis Journals, vol. 16(3), pages 141-157.
- 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).
- 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.
- Roson Roberto, 2005. "Two-Sided Markets: A Tentative Survey," Review of Network Economics, De Gruyter, vol. 4(2), pages 1-19, 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.
- 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.
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 references are entirely missing, you can add them using this form.