Antitrust, the Internet, and the Economics of Networks

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

42 Pages Posted: 21 Dec 2013  

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

Date Written: 2013

Abstract

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.

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

Suggested Citation

Spulber, Daniel F. and Yoo, Christopher S., Antitrust, the Internet, and the Economics of Networks (2013). 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. Available at SSRN: https://ssrn.com/abstract=2370050

Daniel F. Spulber

Northwestern University - Kellogg School of Management ( email )

606 Leverone Hall
2001 Sheridan Road
Evanston, IL 60208
United States
847-491-8675 (Phone)
847-467-1777 (Fax)

Christopher S. Yoo (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom St.
Philadelphia, PA 19104-6204
United States
(215) 746-8772 (Phone)

HOME PAGE: http://www.law.upenn.edu/faculty/csyoo/

University of Pennsylvania - Annenberg School for Communication ( email )

3620 Walnut St.
Philadelphia, PA 19104-6220
United States
(215) 746-8772 (Phone)

University of Pennsylvania - School of Engineering and Applied Science ( email )

3330 Walnut St.
Philadelphia, PA 19104-6309
United States
(215) 746-8772 (Phone)

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