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
42 Pages Posted: 21 Dec 2013
Date Written: 2013
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: Suggested Citation