Antitrust, the Internet, and the Economics of Networks
Daniel F. Spulber
Northwestern University - Kellogg School of Management
Christopher S. Yoo
University of Pennsylvania Law School; University of Pennsylvania - Annenberg School for Communication; University of Pennsylvania - School of Engineering and Applied Science
Oxford Handbook of International Antitrust Economics, Roger D. Blair & D. Daniel Sokol eds., Oxford University Press, 2014, Forthcoming
U of Penn, Inst for Law & Econ Research Paper No. 13-36
Network industries, including the Internet, have shown significant growth, substantial competition, and rapid innovation. This Chapter examines antitrust policy towards network industries. The discussion considers the policy implications of various concepts in the economics of networks: natural monopoly, network economic effects, vertical exclusion, and dynamic efficiency. Our analysis finds that antitrust policy makers should not presume that network industries are more subject to monopolization than other industries. We find that deregulation and the strength of competition in network industries have removed justifications for structural separation as a remedy. Also, we argue that that deregulation and competition have effectively eliminated support for application of the essential facilities doctrine. Antitrust policy in network industries should be guided by considerations of dynamic efficiency.
Number of Pages in PDF File: 42
Keywords: Antitrust, transportation, utilities, information networks, law and technology, economics, types of networks, natural monopoly, network economic effects, vertical exclusion, dynamic efficiency, structural remedies, vertical separation, behavioral remedies, essential facilities doctrine
JEL Classification: K21, L14
Date posted: December 21, 2013
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