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Happily ever after? Vertical and horizontal mergers in the U.S. media industry

Annika Stöhr, Victoriia Noskova, Philipp Kunz-Kaltenhäuser, Sophia Gänßle and Oliver Budzinski

No 126, Ilmenau Economics Discussion Papers from Ilmenau University of Technology, Institute of Economics

Abstract: This paper provides an economic analysis of recent vertical and horizontal mergers in the U.S. industry for audiovisual 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: (i) Is the current development of analyzing industry with its recent merger activity concerning? (ii) Would vertical or horizontal integration be more preferable for overall welfare and competition in this industry? (iii) What are implications for antitrust policy? We conclude from our analysis that in the already highly horizontally concentrated U.S. market for audiovisual 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.

Keywords: competition policy; antitrust; industrial economics; digitization; media economics; institutional economics; industrial organization; mergers; vertical integration; horizontal integration (search for similar items in EconPapers)
JEL-codes: L42 L41 K21 K23 L82 L86 L13 D43 L51 L96 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-com, nep-cul, nep-ind and nep-law
References: View references in EconPapers View complete reference list from CitEc
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuiedp:126

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