Oliver Budzinski, Annika Stöhr, Victoriia Noskova, Philipp Kunz-Kaltenhäuser, Sophia Gaenssle
{"title":"Happily Ever After?: Vertical and Horizontal Mergers in the US Media Industry","authors":"Oliver Budzinski, Annika Stöhr, Victoriia Noskova, Philipp Kunz-Kaltenhäuser, Sophia Gaenssle","doi":"10.54648/woco2020007","DOIUrl":null,"url":null,"abstract":"This article provides an economic analysis of recent vertical and horizontal mergers in the US industry for audio-visual media content, including the AT&T–Time Warner and the Disney– Fox mergers. Using a theory-driven approach, we examine economic effects of these types of mergers on market competition, focusing on digital media content distribution.\nIn doing so, we address three research questions: (1) Is the current development of the industry with its recent merger activity concerning? (2) Would vertical or horizontal integration be more preferable for overall welfare and competition in this industry? (3) What are implications for antitrust policy?\nWe conclude from our analysis that in the already highly horizontally concentrated US market for audio-visual content the process of further vertical integration creates concerns from a competition policy perspective. Moreover, even though horizontal concentration on some of the market stages may be anticompetitive as well, vertical integration is likely to be more harmful. As a consequence, we recommend a stricter approach to vertical merger control in this industry, as well as a more active abuse control against already vertically integrated media companies.\ncompetition policy, antitrust, industrial economics, digitization, media economics, institutional economics, industrial organization, mergers, vertical integration, horizontal integration","PeriodicalId":43861,"journal":{"name":"World Competition","volume":"8 1","pages":""},"PeriodicalIF":0.7000,"publicationDate":"2020-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"4","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"World Competition","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.54648/woco2020007","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"LAW","Score":null,"Total":0}
引用次数: 4
Abstract
This article provides an economic analysis of recent vertical and horizontal mergers in the US industry for audio-visual media content, including the AT&T–Time Warner and the Disney– Fox mergers. Using a theory-driven approach, we examine economic effects of these types of mergers on market competition, focusing on digital media content distribution.
In doing so, we address three research questions: (1) Is the current development of the industry with its recent merger activity concerning? (2) Would vertical or horizontal integration be more preferable for overall welfare and competition in this industry? (3) What are implications for antitrust policy?
We conclude from our analysis that in the already highly horizontally concentrated US market for audio-visual content the process of further vertical integration creates concerns from a competition policy perspective. Moreover, even though horizontal concentration on some of the market stages may be anticompetitive as well, vertical integration is likely to be more harmful. As a consequence, we recommend a stricter approach to vertical merger control in this industry, as well as a more active abuse control against already vertically integrated media companies.
competition policy, antitrust, industrial economics, digitization, media economics, institutional economics, industrial organization, mergers, vertical integration, horizontal integration