Econ Seminar: Acquisitions in the Digital Economy

On April 29, Laureen de Barsy will present her research on killer acquisition in the digital economy with Prof. Axel Gautier.

Among the many challenges that poses the digital economy in the protection of competition, practitioners and academics have become increasingly worried about “killer acquisitions” by the GAFAM platforms. This term refers to the practice of buying up (potential) market entrants with the goal of reducing future competition. However, empirical evidence on the existence and significance of killer acquisitions in the digital sector is scarce.
  
This paper contributes to filling in the gap by looking into the fate that awaits patent-protected technologies acquired by the GAFAM platforms. We create a dataset of all public GAFAM acquisitions since 1996. For each of these acquisitions, we collect information on the acquired intellectual property. Our focus on patent data allows us to identify signs of killer acquisitions. First, we can identify when the acquired technology is discontinued using information on whether the new patent holder pays the renewal fees to keep the associated patents alive. We then test whether acquisitions that lead to the discontinuation of the acquired technologies are consistent with the killer motive. Second, because ‘prior art’ is included in a patent by citations to previous patents, studying the evolution of the number of forward citations by the acquirer to the acquired technology around the acquisition time will help us shed light on the motivations driving GAFAM acquisitions.

Where? Room 2/92 B.31

When? April 29, 1.30-3.00 p.m.