CRA advised IRI and Aztec, two providers of retailer scanner price data to manufacturers and retailers, on their recent merger before the OFT. IRI was the number two provider of retail scanner data after AC Nielsen, whilst Aztec (through its subsidiary Litmus) was the number three provider. The OFT was concerned that the merger would give rise to a significant lessening of competition in the supply of scanner price data. However as CRA showed, IRI and Litmus focussed on different segments, with IRI providing data from major supermarket retailers, whilst Litmus focused on data from convenience retailers. The lack of competition between the parties was reflected in both an analysis of IRI and Litmus bidding for contracts, and the lack of customer switching between the parties. Surprisingly the OFT also raised the question of conglomerate effects, supposing that IRI’s access to Litmus’s exclusive convenience contracts may allow it foreclose Nielsen from the supermarket data segment through bundling. We assisted IRI by showing that not only was such a foreclosure strategy unlikely to be feasible, but any price reduction through the bundling of supermarket and convenience data would reduce double marginalisation, intensify competition with Nielsen and therefore benefit consumers. The OFT cleared the merger unconditionally on December 13, 2013.
The CRA team included Dr. Matthew Bennett, Dr. Oliver Latham, and James Andrews.
The EU’s SEP proposal: A geopolitical perspective
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