Make or Buy Decisions and Data Sharing (2026-05)

Firms may share data to discover potential synergies between their data sets and algorithms,
eventually leading to more efficient mergers and acquisitions (M&A) decisions. However,
data sharing also modifies the competitive balance when firms do not merge, and a company
may be reluctant to share data with potential rivals. Under general conditions, we show that
firms benefit from (partially) sharing data. By doing so, they can merge conditionally based
on high synergies. Compared to a laissez-faire situation, the presence of a regulator allowing
or refusing the M&A may increase or decrease data sharing, with a concomitant increase
or decrease in consumer surplus. Hence, regulation can lower the surplus of consumers it is
willing to protect. We revisit the Google/Fitbit acquisition through the lens of this interplay
between strategic data sharing and antitrust policy.