Wednesday, March 15, 2017
Going Digital: How Online Competition Changed Market Definition and Swayed Competition Analysis in Fnac/Darty
Simon Genevaz and Jérôme Vidal explore Going Digital: How Online Competition Changed Market Definition and Swayed Competition Analysis in Fnac/Darty.
ABSTRACT: On 27 July 2016, the French Competition Authority cleared Fnac's acquisition of its rival consumer electronics retailer Darty. The clearance was subject to a limited number of divestiture commitments (six stores), an admittedly leaner remedy than early observers may have expected. Online competition played a key role in the assessment of the transaction, a 3-to-2 merger in nationwide retail chains. In fact, the Fnac/Darty decision may be among the first in Europe to find that online and physical retailing are sufficiently substitutable to form a single product market.3 Evidently, including online retailers in the relevant market greatly contributed to mitigating the merger's anticompetitive effects and accepting relatively narrow remedies.