Reassessing Competition Concerns in Electronic Communications Markets

30 Pages Posted: 15 Dec 2014

See all articles by Martin Peitz

Martin Peitz

University of Mannheim - Department of Economics

Tommaso M. Valletti

Imperial College Business School; Centre for Economic Policy Research (CEPR)

Date Written: December 15, 2014

Abstract

Central features of today’s electronic communications markets are complementarities between the different layers of the value chain, substitutability between some applications, network effects in the provision of content and services, two-sided business models that partly involve indirect revenue generation (such as advertising and data profiling), and a patchwork of regulated and unregulated segments of the market. This complexity requires a fresh look at the market forces shaping the industry and a rethinking of market definitions and of the assessment of market power. This article presents the state of play in European electronic communication markets, with a particular emphasis on the recent development of “over the tops”. We also use a stylised model of an electronic communications market to draw some central lessons from economic theory and to elaborate on market definition and market power.

Keywords: Telecommunications, OTT, relevant market, two-sided markets, market power

JEL Classification: D82, L13, L41, L51, L86, L96

Suggested Citation

Peitz, Martin and Valletti, Tommaso M., Reassessing Competition Concerns in Electronic Communications Markets (December 15, 2014). ZEW - Centre for European Economic Research Discussion Paper No. 14-101. Available at SSRN: https://ssrn.com/abstract=2538421 or http://dx.doi.org/10.2139/ssrn.2538421

Martin Peitz (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany
+49 621 181-1835 (Phone)

HOME PAGE: http://peitz.vwl.uni-mannheim.de/

Tommaso M. Valletti

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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