Springer-ProSiebenSat.1-Merger
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3.1 Strengthening of Collective Dominance (TV-Markets)
As outlined in the last paragraph of section 2.2, a conglomerate merger can poten-
tially strengthen an existing collective dominance and, thus, increase concerns about
anticompetitive coordinated oligopoly effects. Since a conglomerate merger does not
reduce the number of competitors, an increased probability of coordinated effects
predominantly arises if the merger leads to multimarket contact (improved retaliation
mechanism), (thereby) making the oligopolists more symmetric, and increases barri-
ers to entry. In order to derive anticompetitive effects, two steps of analysis are nec-
essary: first, an existing collective dominance of the RTLGroup-P7S1 duopoly on the
TV advertising market must be proved, i.e. a lack of competition between RTLGroup
and P7S1 pre-merger (Bundeskartellamt 2006: 29-38), and, second, it must be dem-
onstrated how this coordinated behaviour becomes stabilised or increased post-merger
(Bundeskartellamt 2006: 38-41).
3.1.1 Uncompetitive Duopoly?
The task of identifying coordinated effects belongs to the most challenging ones in
merger control, because tight oligopolies tend to the extremes: the recognition of
strong mutual interdependence of the competitors can either induce fierce competition
or coordinated behaviour (uncompetitive co-existence). Economic oligopoly theory
has identified a set of market characteristics that increase the likelihood of coordi-
nated equilibria at the expense of competitive rivalry, namely (i) a limited number of
competitors, (ii) a high degree of homogeneity in terms of products and cost struc-
tures, (iii) a high level of market transparency, (iv) significant barriers to entry, (v)
the absence of significant buyer power, (vi) a low probability of detection and legal
sanctions, (vii) multi-market contacts, (viii) past experience with coordination, and
(ix) a stable economic environment.11
In line with contemporary economic thinking, the Bundeskartellamt (2006: 29-38)
convincingly identifies a considerable number of market characteristics that facilitate
coordinated effects. In the first place, the TV advertising market is without doubt
highly concentrated and dominated by two players - RTLGroup and P7S1 with more
or less constant market shares over the last years of about 40 % each. It seems to be
less obvious, however, that the marketed products are homogeneous since it matters
whether an advertising minute is aired during a popular movie at prime time or a spe-
cial interest broadcast at midnight. However, similar to other media markets, like the
music industry12, RTLGroup and P7S1 can be viewed to offer a comparable range of
products, so that the complete package of offered advertising environment is rather
homogeneous. Consequently, a homogeneous average cost structure result. Addition-
11 See Aigner/Budzinski/Christiansen (2006: 312-319) for a review of the economic theory of coordi-
nated effects and the evolution of the European Commission’s collective dominance policy.
12
See, for instance, the reasoning in the Sony-BMG merger case (Aigner/Budzinski/Christiansen
2006).