Platform Mergers and Antitrust

30 Pages Posted: 11 Jan 2021 Last revised: 11 Sep 2021

See all articles by Geoffrey Parker

Geoffrey Parker

Dartmouth College

Georgios Petropoulos

Massachusetts Institute of Technology (MIT); Bruegel; Stanford University

Marshall W. Van Alstyne

Boston University – Questrom School of Business; Massachusetts Institute of Technology (MIT) - Sloan School

Date Written: January 10, 2021

Abstract

Should internet era merger policy differ from industrial era merger policy? Platform ecosystems rely on economies of scale, data-driven economies of scope, high-quality algorithmic systems, and strong network effects that frequently promote winner-take-most markets. Their market dominance has generated competition concerns that appear difficult to assess with traditional merger policy tools. This paper examines the acquisition strategies of the five major U.S. platforms—Google, Amazon, Facebook, Apple, and Microsoft— since their inception. We discuss the main merger and acquisition theories of harm and how these operate differently than in the past. To address merger and acquisition concerns of multi-sided platforms, we develop four proposals that incorporate (i) a new ex ante regulatory framework, (ii) an update of the conditions under which the notification of mergers should be compulsory and the burden of proof should be reversed, (iii) differential regulatory priorities in investigating horizontal versus vertical acquisitions, and (iv) an update of competition enforcement tools to increase visibility into market data and trends.

Keywords: Merger policy, Digital platforms, antitrust, Regulation

JEL Classification: D20, K21, L40, L41, L42, L43, L51, L86, M13, M21

Suggested Citation

Parker, Geoffrey and Petropoulos, Georgios and Van Alstyne, Marshall W., Platform Mergers and Antitrust (January 10, 2021). Boston University Questrom School of Business Research Paper No. 376351, Available at SSRN: https://ssrn.com/abstract=3763513 or http://dx.doi.org/10.2139/ssrn.3763513

Geoffrey Parker

Dartmouth College ( email )

Department of Sociology
Hanover, NH 03755
United States
603-646-9075 (Phone)

HOME PAGE: http://engineering.dartmouth.edu/people/faculty/geoffrey-parker

Georgios Petropoulos (Contact Author)

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Bruegel ( email )

Rue de la Charité 33
B-1210 Brussels Belgium, 1210
Belgium
22274217 (Phone)
22274217 (Fax)

Stanford University ( email )

Stanford, CA 94305
United States

Marshall W. Van Alstyne

Boston University – Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
617-358-3571 (Phone)

HOME PAGE: http://questromapps.bu.edu/mgmt_new/Profiles/VanAlstyneMarshall.html

Massachusetts Institute of Technology (MIT) - Sloan School ( email )

Initiative on the Digital Economy
245 First St, Room E94-1521
Cambridge, MA 02142
United States
617-253-0768 (Phone)

HOME PAGE: http://web.mit.edu/marshall/www/home.html

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