Cross-industry Mergers and Acquisitions and Leverage Transmission in the Platform Economy:A Personalized Pricing Perspective
In China,large platform enterprises such as Tencent and Alibaba often seek to expand into different markets through cross-industry mergers and acquisitions(M&As).These cross-industry M&As are referred to as conglomerate M&As in antitrust enforcement.Unlike horizontal M&As,which may lead to increased market concentration and vertical M&As,which can cause market foreclosure,conglomerate M&As generally raise the least concern among antitrust en-forcement agencies.However,with the rise of monopolistic behaviors in the platform economy and the growing focus of Chinese antitrust enforcement agencies on this sector,there has been renewed consideration of the potential anti-competitive effects of cross-industry M&As in the platform economy.Large platform enterprises possess the capability to collect,analyze,and utilize consumer data.Utilizing this capabil-ity,platform enterprises can engage in personalized pricing for consumers and offer products and services that better match consumer preferences,leading to complex competitive effects.After cross-industry M&As,platform enterprises can also use consumer information in new markets,thereby extending their market power.In antitrust contexts,the effect of a company transferring its market power to another market is known as the leverage effect.In traditional industries,le-verage effects are often achieved through bundling and tying.However,in the digital economy,platform enterprises can use shared consumer information across two markets to engage in personalized pricing in a new market,thus influencing competition in that market.Based on this,this paper explores the economic effects of platform enterprises utilizing consumer information across markets through cross-industry M&As,and examines the resulting competitive impacts.This paper assumes that there are two online markets:Market I boasts a monopolistic platform while Market Ⅱ consists of two platforms that form a duopo-listic market structure.Suppose that the monopolistic platform of Market I possesses both information and technological advantages.Then,when the monopolistic platform initiates M&A on a platform in Market Ⅱ,it may use its competitive advantage to transmit market power from Market I to Market Ⅱ.This paper proves that there are two types of equilibrium:market agglomeration equilibrium and market allocation equilibrium.In market agglomeration equilibrium,price compe-tition in Market Ⅱ after M&A will be more intense,resulting in strengthened competition;on the contrary,market alloca-tion equilibrium will lead to an increase in the price of Market Ⅱ,which will produce an equilibrium effect that weakens market competition.Our theoretical analysis has important policy implications for the antitrust practice of M&A review in China's plat-form economy:cross-industry M&As of platform enterprises may not only promote competition but also cause competi-tive damage through leverage transmission.The specific outcome is determined by which kind of equilibrium the M&A initiator may produce using its information and technological advantages.Only when there is a market allocation equilib-rium will regulatory intervention be required to reduce the loss of consumer welfare caused by leverage transmission.Ac-cordingly,this paper argues that in order to conduct a scientific review and evaluation of cross-industry M&As in the plat-form economy,it is essential to base assessments on thorough economic analysis.This approach will help determine the equilibrium outcomes of M&As and,consequently,assess their competitive effects.
Platform EconomyCross-industry Mergers and AcquisitionsLeverage TransmissionPersonalized Pricing
万方数据
维普
