Budzinski/Wacker: Springer-ProSiebenSat.1-Merger
20
In economic terms, combining the products TV advertising (via P7S1) with newspa-
per advertising (via BILD) in order to create a new product - an integrated cross-
media advertising campaign - represents a bundling strategy (see section 2.2). Some-
what along the lines of the cross-promotion reasoning (see above section 3.2.2), the
Bundeskartellamt concentrates on demonstrating that offering cross-media advertising
campaigns from one source - as a bundle - represents a profitable business strategy.
In doing so, the competition agency cites several industry studies, which show an in-
creasing demand for such integrated campaigns by the advertising industry. Inter alia,
it is emphasised that “concerning introductory campaigns, price promotions as well as
openings, a mix of advertising in TV and in newspapers is essential” and, explicitly
from one of the studies, “pure TV or print campaigns are less efficient than mix cam-
paigns”.22 Thus, the alleged anticompetitive character of cross-media advertising
campaigns is established precisely because they are efficient, i.e. offers a customer
surplus! This stands perfectly in line with economic theory identifying particular
strong efficiency effects of cross-market bundling strategies when both markets are
two-sided in character (advertising plus reader/viewer) (Rochet/Tirole 2003; Roson
2005: 156). To put it modestly, the Bundeskartellamt comes close to an efficiency
offence. Obviously, the profitability of this type of cross-media strategies rests on
customer-benefiting efficiency gains instead of market power.
Theoretical economic reasoning holds that bundling is generally efficient and wel-
fare-enhancing except of specific cases, in particular when pure bundling serves to
leverage existing (single-firm) market power across the affected markets by squeezing
out or deterring competitors from the target market (see above section 2.2). In the AS-
P7S1-case, the necessary market power might exist on the newspaper advertising
market (market share AS ~ 50 % compared to next best competitor ~ 25 %). It does,
however, not exist on the TV advertising market (market shares of both P7S1 and
RTLGroup about 45 % each). Consequently, a leveraging of AS’s market power on
the newspaper advertising market onto the TV advertising market, in an attempt to
push back RTLGroup, could be subject to analysis. This could be backed by the (al-
leged) unique and unassailable market position of the BILD, which requires custom-
ers of big cross-media advertising campaigns to include advertising in BILD in their
campaign and, thus, makes them prone to the bundle offer. However, this is not con-
sidered by the competition agency because it would obviously contradict with its as-
sessment of an uncompetitive duopoly situation on the TV advertising market that
would become further strengthened through the merger (see above section 3.1).
Therefore, (allegedly) anticompetitive bundling can merely serve to maintain or en-
hance AS’s market power in the newspaper advertising market (see section 2.2).
However, since the market position of BILD has been characterised as intangible in
any event (Bundeskartellamt 2006: 43), it remains unclear whether this effect might
be considerable. It is hard to see how campaign customers who refrain from advertis-
22
Both citations are our translations from the original German text in Bundeskartellamt (2006: 64).