May 20, 2020

Brown Bag Seminar Cluster Industrial Economics

Big Tech Acquisitions in the Google Play Store

Date

May 20, 2020
14:30 - 15:30

Location

Online seminar via Webex

Speaker

Pauline Affeldt

This is an online seminar using Webex. You will receive the login data with the invitation to the talk.

Abstract:  In the last ten years, Google, Apple, Facebook, Amazon, and Microsoft (GAFAM) acquired more than 400 companies, predominantly in the technological sector. Competition authorities did not scrutinize most of these transactions, as they did not reach the traditional thresholds, while those reviewed were not blocked. As a result, a number of policy reports recently voiced their concerns about the competitive effects of such acquisitions that possibly target potential competitors but fly under the radar of current merger control due to the features of the digital economy. With this paper, we are the first to empirically study the competitive effects of big tech acquisitions in a relevant online market. In particular, we identify app acquisitions by GAFAM in the Google Play Store from 2015 to 2019 and match these to a database covering almost all apps available in the Google Play Store. This allows us to not only follow the development of acquired apps over time but also observe competing apps. Preliminary results suggest that about half of the acquired apps are shut down post acquisition. While competing apps seem to react to GAFAM’s app acquisitions by updating less, there is no clear pattern for competitors’ prices and privacy-sensitive permissions requested following the acquisition. This suggests that for this type of acquisitions, competition authorities should in particular investigate the effects on innovation rather than focussing on short-term price effects.

- Very preliminary -

Speaker

Pauline Affeldt, DIW Berlin & TU Berlin