How Do Competition Policy and Data Brokers Shape Product Market Competition?

Arbeitspapier

This paper empirically analyzes how a data broker affects competition in oligopolistic product markets. It examines a unique case concerning the two dominant Finnish food retail companies’ voluntary withdrawal from information exchange via a data broker. Moreover, the companies jointly approached the Finnish antitrust authority, originating an investigation whether their prior horizontal information exchange was illegal. This resulted in the permanent termination of a data broker’s business in the Finnish food retail sector. The empirical analysis employs quarterly data from the food retail sector of the old EU15 countries for 2005–2017. The difference-in-differences model is used to explore the competitive impacts of a termination of vertical and horizontal information exchange via a data broker in the Finnish food retail sector. Data suggest that competition was less fierce and product prices higher after the termination of information exchange via a data broker. Longer-term evidence on the price increase in the absence of a data broker is inconclusive. Furthermore, discontinuation of data exchange from the downstream to the upstream firms facilitated downstream bargaining power and generated a long-term increase in the gap between retail and producer prices.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ETLA Working Papers ; No. 61

Classification and Topics

• Classification: Wirtschaft ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Oligopoly and Other Imperfect Markets ; Monopolization; Horizontal Anticompetitive Practices ; Retail and Wholesale Trade; e-Commerce
• Subject: Data brokers ; Market for data ; Competition ; Competition policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Koski, Heli
• Event: Veröffentlichung
• (who): The Research Institute of the Finnish Economy (ETLA)
• (where): Helsinki
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/201276
• Last update: 10.03.2025, 11:41 AM CET