Computing Abuse Related Damages in the Case of New Entry: An Illustration for the Directory Enquiry Services Market

64 Pages Posted: 12 Oct 2006

See all articles by Maite Martínez-Granado

Maite Martínez-Granado

University of the Basque Country - Department of Foundations of Economic Analysis I; Centre for Economic Policy Research (CEPR)

Georges Siotis

Universidad Carlos III de Madrid - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: September 2006

Abstract

A number of European countries, among which the UK and Spain, have opened up their Directory Enquiry Services (DQs) market to competition. In Spain, both local and foreign firms challenged the incumbent as of April 2003. The latter abused its dominant position by providing an inferior quality version of the (essential) input, namely the subscribers' database. We illustrate how it is possible to quantify the effect of abuse in situation were the entrant has no previous history in the market. We use the UK experience to construct the relevant counterfactual, that is the "but for abuse" scenario. After controlling for relative prices and advertising intensity, we find that one of the foreign entrants achieved a Spanish market share substantially below what it would have obtained in the absence of abuse.

Keywords: Competition policy, abuse of dominance, telecommunications

JEL Classification: C22, L41, L96

Suggested Citation

Martínez-Granado, Maite and Siotis, Georges, Computing Abuse Related Damages in the Case of New Entry: An Illustration for the Directory Enquiry Services Market (September 2006). CEPR Discussion Paper No. 5813, Available at SSRN: https://ssrn.com/abstract=936974

Maite Martínez-Granado (Contact Author)

University of the Basque Country - Department of Foundations of Economic Analysis I ( email )

Avda. Lehendakari Aguirre 83
48015 Bilbao
Spain

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Georges Siotis

Universidad Carlos III de Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain
+34 91 624 9312 (Phone)
+34 91 624 9875 (Fax)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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