A Strategic Guide on Two-Sided Markets Applied to the ISP Market

Abstract

This paper looks at a new body of literature that deals with two-sided markets and focuses on the Internet Service Provider (ISP) segment. ISPs seem to act as a platform enabling transactions between web sites and end consumers. We propose a strategic guide for ISPs that covers features of two-sided markets such as strong externalities and discuss how these market characteristics can affect competition policy.

Keywords: Platform, externalities, price allocation, competition policy

JEL Classification: L51, L96, L86