Riassunto analitico
In the last decade, we have seen an important market expansion of the big tech giants, such as the American firms Google, Facebook, Amazon, Apple, Microsoft, but also Chinese companies like Alibaba, Tencent, and Baidu, with an increase of their acquisitions and a subsequent growth of their market power. Market power allows firms to exploit the consumers by charging higher prices, diminishing the consumer surplus, and increasing the profit of the monopolistic firms, and exploit workers by paying lower wages than they would otherwise. In addition, market power is strictly connected to political power and allows corporations to buy influence that further enhances their power and profits. But, most important, market power can allow firms to use anti-competitive strategies, creating barriers to entry for the potential competitors and maintain their dominant position. The pre-emptive acquisition represents one of these strategies, especially used by the big tech companies, that consists in buying potential competitors before they could be effectively a threat and before the Antitrust policies could interfere and analyze the agreement. In our paper, we analyze the acquisitions made by three American (Google, Facebook, Amazon) and three Chinese (Baidu, Tencent, Alibaba) big tech companies that occurred in the last twenty years, and more specifically we will focus our attention on the digital and social media market, by comparing the acquisition strategies of Facebook and Tencent. The final scope is to verify if these digital giants have implemented pre-emptive acquisitions with the aim of illegally monopolizing the market, in order to do that we have created a database, with the help of Crunchbase, which summarizes all the acquisitions made by our six companies through the years.
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Abstract
In the last decade, we have seen an important market expansion of the big tech giants, such as the American firms Google, Facebook, Amazon, Apple, Microsoft, but also Chinese companies like Alibaba, Tencent, and Baidu, with an increase of their acquisitions and a subsequent growth of their market power. Market power allows firms to exploit the consumers by charging higher prices, diminishing the consumer surplus, and increasing the profit of the monopolistic firms, and exploit workers by paying lower wages than they would otherwise. In addition, market power is strictly connected to political power and allows corporations to buy influence that further enhances their power and profits. But, most important, market power can allow firms to use anti-competitive strategies, creating barriers to entry for the potential competitors and maintain their dominant position. The pre-emptive acquisition represents one of these strategies, especially used by the big tech companies, that consists in buying potential competitors before they could be effectively a threat and before the Antitrust policies could interfere and analyze the agreement. In our paper, we analyze the acquisitions made by three American (Google, Facebook, Amazon) and three Chinese (Baidu, Tencent, Alibaba) big tech companies that occurred in the last twenty years, and more specifically we will focus our attention on the digital and social media market, by comparing the acquisition strategies of Facebook and Tencent. The final scope is to verify if these digital giants have implemented pre-emptive acquisitions with the aim of illegally monopolizing the market, in order to do that we have created a database, with the help of Crunchbase, which summarizes all the acquisitions made by our six companies through the years.
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