Regulating Over-the-Top Service Providers in Two-Sided Content Markets: Insights from the Economic Literature

Abstract

In this paper we scrutinize the request to regulate access to the OTTs’ essential services bottleneck based on insights from the economic literature. First, we delineate that OTTs may pursue a one-sided or two-sided business model, which makes a fundamental difference with respect to the underlying economics. Focusing on two-sided content markets, we then discuss three scenarios that differ in the degree of competition that OTTs may face, ranging from potential competition over access-based competition (via access regulation) to actual platform competition. Although access regulation may have merits, it is very questionable whether such regulation should be pursued due to a high uncertainty concerning the economic benefits and necessity as well as practical legal problems.

Keywords: Over-the-Top Services, Two-sided Markets, Access Regulation, Telecommunications, Internet

JEL Classification: K23, L51, L96