In 2019, on behalf of the Competition and Markets Authority, Lear carried out an ex post evaluation study of five merger decisions in the digital sector taken by the Office of Fair Trading, including the takeover of Instagram by Facebook and Google’ acquisition of Waze. While these mergers were allowed to go ahead at the time, our study found that they may have been instrumental in strengthening the market power currently enjoyed by Facebook and Google, and that the investigations carried out by the OFT at the time may have failed to identify the ways that these mergers could have affected competition. These conclusions were informed by a comprehensive review of the economic literature on digital markets and by an examination of digital merger cases undertaken by other competition authorities.
Among the policy recommendations made by the study, Lear suggested that the CMA undertake a market study into digital advertising, to understand how these markets functions and the sources of the market power that certain players of the digital advertising industry enjoy. This recommendation was taken up by the CMA, whose market study on online platforms and digital advertising was published in July 2020.