Tuesday, January 31, 2017

Going Digital: How Online Competition Changed Market Definition and Swayed Competition Analysis in Fnac/Darty

Simon Genevaz and Jerome Vidal (both French Competition Authority) describe 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. Evidently, including online retailers in the relevant market greatly contributed to mitigating the merger's anticompetitive effects and accepting relatively narrow remedies. This article explains the methodology and evidence used to broaden the relevant market and how the Authority analysed competition exerted by internet retailers on physical retail chains. It also assesses the decision's impact on future enforcement.

https://lawprofessors.typepad.com/antitrustprof_blog/2017/01/going-digital-how-online-competition-changed-market-definition-and-swayed-competition-analysis-in-fn.html

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