Antitrust Analysis for the Internet Upstream Market: A Border Gateway Protocol Approach

Journal of Competition Law and Economics, Vol. 2, No. 1, pp. 43–69, 2006

Posted: 12 Mar 2012

See all articles by Emanuele Giovannetti

Emanuele Giovannetti

Anglia Ruskin University

Alessio D'Ignazio

University of Cambridge - Faculty of Economics and Politics

Date Written: FEBRUARY 24, 2006

Abstract

We study concentration in the European Internet upstream access market. The possibility of measuring market concentration depends on a correct definition of the market itself; however, this is not always possible, because very often in the Internet industry antitrust authorities lack reliable pricing and traffic data. We present an alternative approach based on the inference of the Internet operators’ interconnection policies using micro-data from their Border Gateway Protocol (BGP) tables. We assess market concentration following a two-step process: first, we propose a price-independent algorithm for defining both the vertical and geographical relevant market boundaries; then we calculate market concentration indexes using two novel metrics. These assess, for each undertaking, its role both in terms of essential network facility and of wholesale market dominance. The results, applied to four leading Internet exchange points in London, Amsterdam, Frankfurt, and Milan, show that some vertical segments of these markets are highly concentrated, while others are extremely competitive. According to the Merger Guidelines, some of the estimated market concentration values would immediately fall within the special attention category.

Keywords: Internet, peering, backbone, market structure, networks

JEL Classification: L96, L98, L40

Suggested Citation

Giovannetti, Emanuele and D'Ignazio, Alessio, Antitrust Analysis for the Internet Upstream Market: A Border Gateway Protocol Approach (FEBRUARY 24, 2006). Journal of Competition Law and Economics, Vol. 2, No. 1, pp. 43–69, 2006 . Available at SSRN: https://ssrn.com/abstract=2019507

Emanuele Giovannetti (Contact Author)

Anglia Ruskin University ( email )

East Road
Cambridge, Cambridgeshire CB1 1PT
United Kingdom

HOME PAGE: http://https://aru.ac.uk/people/emanuele-giovannetti

Alessio D'Ignazio

University of Cambridge - Faculty of Economics and Politics ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
452
PlumX Metrics