DefinePK

Abstract

The frequent mergers and acquisitions (M&As) between ride-hailing platforms have raised new challenges for merger control authorities. These ride-hailing platforms fall under the purview of two-sided markets, which are totally different from the traditional static markets. The dynamics structure of two-sided markets and presence of indirect network effects makes the ecosystem of platforms highly complicated and difficult to understand. The traditional merger control framework often fails to capture the complexities of these markets due to their limitations. This article aims to identify the shortcomings of traditional tools and techniques by taking into consideration the Uber-Careem merger case in Pakistan. By conducting a regulatory gap analysis grounded in the emerging literature, this study extends the critical insights of challenges associated with market definition, market power and anti-competitive analysis. To demonstrate the complications of two-sided platforms, a theoretical model has been formulated in this article which offers a basic pathway to understand the key insights and limitations of traditional tools and techniques. This study concludes that traditional merger assessment techniques designed for static ‘one-sided markets lead to misinterpretation when applied in ‘two-sided markets. Finally, this article put forward suggestions for perfecting the competition policy and merger control regulations in digital markets