Ecosystem theories of harm in EU merger control: analysing competitive constraints and entrenchment

Abstract

We define ecosystems as (a collection of) platforms with multiple complementary components and then identify two ‘ecosystem theories of harm’ in merger control. First, we adapt the unilateral effects theory from horizontal mergers to ecosystems, where firms exert an actual or potential direct competitive constraint not only at the product layer but also as ‘substitute complementarities’ at the wider ecosystem layer. Second, we adapt the entrenchment theory of harm to ecosystem mergers, distinguishing between procompetitive first-order effects and potentially harmful second-order effects. We discuss the relevance of ecosystem theories of harm with reference to the recent EU merger cases, such as Booking/eTraveli and Amazon/iRobot, and reflect on potential limiting principles such as replicability, openness, and competition on the merits.