On 27 July 2016, the French Competition Authority cleared Fnac's acquisition of its rival consumer electronics retailer Darty.1 The clearance was subject to a limited number of divestiture commitments (six stores2), an admittedly leaner remedy than early observers may have expected. Online competition played a key role in the assessment of the transaction, a 3-to-2 merger in nationwide retail chains. In fact, the Fnac/Darty decision may be among the first in Europe to find that online and physical retailing are sufficiently substitutable to form a single product market.3 Evidently, including online retailers in the relevant market greatly contributed to mitigating the merger's anticompetitive effects and accepting relatively narrow remedies.

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This article explains the methodology and evidence used to broaden the relevant market and how the Authority analysed competition exerted...

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