The New Digital Platforms: Merger Control in Pakistan

TL;DR

This paper examines how Pakistan's competition authority reviews digital mergers compared to traditional ones, revealing similar decision factors and highlighting the need for tailored regulation in the digital economy.

Contribution

It provides an empirical analysis showing Pakistan's merger review process treats digital and traditional markets similarly, informing future policy development.

Findings

CCP uses the same decision variables for digital and traditional M&As

Digital mergers are evaluated with traditional competition criteria

The study supports tailored regulation for digital platforms in Pakistan

Abstract

The Pakistan competition policy, as in many other countries, was originally designed to regulate business conduct in traditional markets and for tangible goods and services. However, the development and proliferation of the internet has led to the emergence of digital companies which have disrupted many sectors of the economy. These platforms provide digital infrastructure for a range of services including search engines, marketplaces, and social networking sites. The digital economy poses a myriad of challenges for competition authorities worldwide, especially with regard to digital mergers and acquisitions (M&As). While some jurisdictions such as the European Union and the United States have taken significant strides in regulating technological M&As, there is an increasing need for developing countries such as Pakistan to rethink their competition policy tools. This paper investigates whether merger reviews in the Pakistan digital market are informed by the same explanatory variables as in the traditional market, by performing an empirical comparative analysis of the Competition Commission of Pakistan's (CCP's) M&A decisions between 2014 and 2019. The findings indicate the CCP applies the same decision factors in reviewing both traditional and digital M&As. As such, this paper establishes a basis for igniting the policy and economic debate of regulating the digital platform industry in Pakistan.