Conglomerate effects arise when a merger has an effect on competition, but the merging firms’ products are not in the same product market, nor are they inputs or outputs of one another.
Mergers exhibiting conglomerate effects have taken on a new prominence in the digital era, as the largest technology companies use acquisitions as a key part of their product development, expansion and recruitment strategies. These transactions are generally considered to be procompetitive: they can allow the combination of complementary skills and assets, improve interoperability, and facilitate innovation. However, there can also be some potential competition concerns associated with these mergers. They include the potential for bundling and tying, reduced innovation incentives, and co-ordinated effects.
Investigating conglomerate effects can be particularly difficult, as it is not straightforward to identify when they are likely to arise. Information gathering, addressing uncertainty in the development of the market, and assessing remedies for conglomerate effects are some of the key challenges faced by competition authorities in these cases.
All related materials for the discussion are available on this page.
Full list of OECD best practice roundtables on competition policy
OECD Handbook on Competition Policy in the Digital Age
Marc Bourreau Bio
Professor of Economics at Telecom Paris, Institut polytechnique de Paris
Eliana Garcés Bio
Director of Economic Policy, Facebook
James Langenfeld Bio
Senior Managing Director, Ankura
Executive Summary with key findings EN|FR
Detailed Summary of the discussion EN|FR
OECD Background note • Note de réflexion de l'OCDE
Paper by Marc Bourreau and Alexandre de Streel
RELATED BEST PRACTICE ROUNDTABLES
Market Power in the Digital Economy and Competition Policy (2022)
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Vertical mergers in the technology, media and telecom sector (2019)
OECD Handbook on Competition Policy in the Digital Age (2022)
Making online markets more competitive: The benefits and challenges of conglomerate merger review (2021)
OECD best practice roundtables on competition