 Mergers in the digital economyAxel Gautier and Joe Lamesch Information Economics and Policy, 2021, vol. 54, issue C Abstract: Over the period 2015–2017, the five giant technologically leading firms, Google, Amazon, Facebook, Apple and Microsoft (GAFAM) acquired 175 companies, from small startups to billion dollar deals. In this paper, we provide detailed information and statistics on the merger activity of the GAFAM and on the characteristics of the firms they acquire. One of the most intriguing features of these acquisitions is that, in the majority of cases, the product of the target is discontinued under its original brand name post acquisition and this is especially true for the youngest firms. There are three reasons to discontinue a product post acquisition: the product is not as successful as expected, the acquisition was not motivated by the product itself but by the target’s assets or R&D effort, or by the elimination of a potential competitive threat. While our data does not enable us to screen between these explanations, the present analysis shows that most of the startups are killed in their infancy. This important phenomenon calls for tighter intervention by competition authorities in merger cases involving big techs. Keywords: Mergers; GAFAM; Platform; Digital markets; Competition policy; Killer acquisition (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:54:y:2021:i:c:s0167624520301347 DOI: 10.1016/j.infoecopol.2020.100890 Access Statistics for this article Information Economics and Policy is currently edited by D. Waterman More articles in Information Economics and Policy from Elsevier |
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