LAW 642 Lecture Notes - Lecture 39: Heinz, Admob, Mobile Advertising
30 May 2020
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Mergers Likely to Produce Unilateral Effects: Monopoly and Dominance
Sirius-XM (2008 statement of the DOJ on decision not to pursue action):
- Sirius and XM were the only satellite radio providers and they proposed to merge.
- DOJ opted to define the market to include regular AM/FM radio and ipods and shit,
which was perhaps a bit generous.
- There appears to be an argument analogous to one in HJ Heinz in that they don’t compete
at the retail level because their systems are not interoperable and there’s a lock-in effect
in that the system is installed at the production of the car, so people can’t really
switch.
o Heinz court really didn’t buy this since there was competition at the wholesale
level, which the DOJ here dismisses because both companies have entered into
long-term exclusivity agreements with every major car manufacturer.
o Subsequently the firms did make their systems interoperable pursuant to FCC
consent decree, so we’re retroskeptical.
- DOJ finds that efficiencies of scale override any anticompetitive concerns.
Google/Admob (2010):
- Facts:
o Google sought to acquire Admob, its direct competitor in the mobile advertising
market.
o Admob derived a majority of its revenue from iphone ads, and Apple has, since
the opening of the investigation, released its own mobile ad technology
Document Summary
Mergers likely to produce unilateral effects: monopoly and dominance. Sirius-xm (2008 statement of the doj on decision not to pursue action): Sirius and xm were the only satellite radio providers and they proposed to merge. Doj opted to define the market to include regular am/fm radio and ipods and shit, which was perhaps a bit generous. Doj finds that efficiencies of scale override any anticompetitive concerns. Ftc opts to close investigation of merger: So there was insufficient incentive to charge supracompetitive prices because that was overridden by desire to compete in downstream phone market. Facts: boeing had 64% of commercial aircraft market, airbus had 30%, mcdonnell. Douglas had 5: the two american companies (boeing and mcd) wanted to merge, airbus is a consortium of european producers, often criticized for illegal use of government subsidies. Eu unilateral effects theory: the european unilateral theory was an abuse of dominance theory premised on boeing"s further entrenchment via increased market share.
