Springer-ProSiebenSat.1-Merger
21
ing in BILD pre-merger can now be forced or induced to include BILD in their cross-
media advertising campaign: if they wanted to advertise in a nationwide over-the-
counter newspaper, then they would be forced to BILD both pre- and post-merger. If
they wanted to advertise in other, different print products (e.g. magazines, non-
boulevard newspapers, etc.), then the merger would not make BILD more attractive to
them.23 Moreover, only a mixed bundling strategy can be expected, since a significant
part of the demand by advertisers will continue to refer either to TV advertising or to
newspaper advertising, rendering a pure bundling strategy economically unalluring.
As a consequence, it is not convincing from an economic perspective that the result-
ing and emphasised procompetitive efficiency and customer surplus effects are (over-
) compensated by anticompetitive deterring effects. Although a thorough balancing of
pro- and anticompetitive effects of cross-media advertising campaigns is not provided
by the German competition agency and, therefore, appropriate data is not available, it
seems highly doubtful that the net effect is welfare decreasing.
As to the alleged strengthening of the collectively dominant position on the TV adver-
tising market, the Bundeskartellamt (2006: 64-66) argues that because of increased
offers of cross-media advertising campaigns, the competitive pressure that BILD with
its unique market position and geographic scope exerts on the TV advertising duopoly
is removed. However, the inclusion of this argument here seems problematic and mis-
placed. The economic logic of cross-media advertising campaigns rests on the com-
plementary character of TV and newspaper advertising for the purposes of the cus-
tomers of these bundles. In the eyes of these customers, no substitute is removed.
Nevertheless, other customers may well view BILD as a (weak) substitute for TV
advertising (which is why solely a mixed bundling strategy makes economically
sense). Thus, a possible anticompetitive effect results merely for the customers not
demanding cross-media campaigns. Furthermore, the economic literature on platform
competition across two-sided markets emphasises that substitutional relations be-
tween two platforms (here: Free-TV channels and over-the-counter newspapers) alle-
viates market power concerns and renders anticompetitive effects of tying and bun-
dling more implausible (Roson 2005: 149-156).
4 Conclusions
In this article, we reviewed the Bundeskartellamt decision on the proposed merger
between Springer and ProSiebenSat.1 from an economic point of view. It was not our
goal to analyse whether the controversial decision by the Bundeskartellamt was cor-
rect or flawed from a legal point of view. Instead, we analysed whether the economic
reasoning in the decision document reflects state-of-the-art economic theory on con-
glomerate mergers. Regarding such types of mergers, anticompetitive effects either do
23 Once again, the actually unique market position of BILD makes leveraging strategies from the
newspapers market to the TV market plausible or at least debatable (see the preceding paragraph),
but not vice versa.