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on Regulation |
| By: | Hanspach, Philip |
| Abstract: | Large digital platform companies increasingly integrate vertically by building Internet infrastructure, such as edge computing facilities, content delivery networks, or submarine cables. These investments enable new services while changing their bargaining power towards the upstream supplier. I model competing investment incentives in Internet infrastructure for an upstream player (e.g., an Internet Service Provider) and a large downstream platform and its effects on competition with smaller downstream platforms without proprietary infrastructure. Investment incentives increase discontinuously both upstream and downstream when the downstream platform has the larger network. With symmetric investment costs, the downstream platform will invest more than a pure upstream player. I discuss the model implications for net neutrality, network access regulation, and efficient side payments between platform and upstream industry. |
| Keywords: | platforms,multi-sided markets,competition policy,net neutrality,Internet,telecommunications infrastructure |
| JEL: | L13 L42 L51 L63 L86 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse22:265633&r=reg |
| By: | Ann Wolverton; Ron Shadbegian; Wayne Gray |
| Abstract: | While several papers examine the effects of renewable portfolio standards (RPS) on electricity prices, they mainly rely on state-level data and there has been little research on how RPS policies affect manufacturing activity via their effect on electricity prices. Using plant-level data for the entire U.S. manufacturing sector and all electric utilities from 1992 – 2015, we jointly estimate the effect of RPS adoption and stringency on plant-level electricity prices and production decisions. To ensure that our results are not sensitive to possible pre-existing differences across manufacturing plants in RPS and non-RPS states, we implement coarsened exact covariate matching. Our results suggest that electricity prices for plants in RPS states averaged about 2% higher than in non-RPS states, notably lower than prior estimates based on state-level data. In response to these higher electricity prices, we estimate that plant electricity usage declined by 1.2% for all plants and 1.8% for energy-intensive plants, broadly consistent with published estimates of the elasticity of electricity demand for industrial users. We find smaller declines in output, employment, and hours worked (relative to the decline in electricity use). Finally, several key RPS policy design features that vary substantially from state-to-state produce heterogeneous effects on plant-level electricity prices. |
| Keywords: | Cost of regulation; employment impacts; renewable portfolio standards |
| JEL: | Q48 Q52 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:22-47&r=reg |
| By: | Prado, Tiago S. |
| Abstract: | This paper presents a comparative analysis of alternative competition policy and regulatory regimes that are proposed to safeguard competition in the digital economy. We review the causes of concentration in several digital markets, and differentiate the objectives of promoting competition in, and for incumbent digital platforms. Then, we analyze five regimes currently suggested in the research literature and explored by practitioners, ranging from precautionary competition policy and traditional ex ante regulatory remedies to ex post competition policy enforcement, ex post regulation and various self-regulation mechanisms. In a time when policy imitation is widespread, our main conclusion is that policy and regulatory regimes, to be effective to promote competition and investment in digital markets, must observe country-specific conditions and challenges. No single approach fits all conditions. This analysis should help policymakers to have a clearer picture on how to design measures to promote competition in the platform economy considering their local context. |
| Keywords: | digital platforms,competition,policy,regulation,antitrust,innovation |
| JEL: | L1 L4 L5 D6 O2 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse22:265666&r=reg |
| By: | Földes, Gábor |
| Abstract: | Telecommunication sector faces to parallel investments into both fiber and 5G, however due to monetization challenges, return on investments often lag behind normal profit expectations. Co-investment, like mobile network sharing can promote cost efficiency, however cooperation raises regulatory concerns related to competition and innovation in the EU. The purpose of this paper to assess the Czech and Hungarian mobile network sharing agreements in CEE that both show higher degree of cooperation, therefore not cleared by the competition regulations, however has been placed in unchanged form for 8 years. The research question is to assess the procompetitive and anticompetitive theoretical aspects and actual impacts of opposed cooperation in terms of net effect, whether benefits outweigh potential drawbacks in particular to foreseen 5G rollout. The research methodology covers the empirical comparison of Czech and Hungarian market data related to market shares, prices and data traffic volume, as well as network quality data on coverage and capacity in 2014-2021-time frame. The main finding is that, although live network sharing agreements have been opposed, main anticompetitive effects could not be justified, and majority of procompetitive benefits fails to be rejected, with the exemption of efficiency gains pass through customers that remains unclear. Despite of benefits may outweigh potential drawbacks even in these not recommended cases, due to lack of regulatory clearance, the 5G rollout launched without sharing, causing social welfare loss. The originality of the paper that it provides an empirical research on such a live network sharing case that is not recommended and not cleared, as sharing contains active network elements and even spectrum, highlighting that even these cases' procompetitive advantages may outweigh anticompetitive ones. |
| Keywords: | 5G,mobile network sharing,cost efficiency,coopetition,competition regulation |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse22:265626&r=reg |
| By: | Jeanjean, Francois |
| Abstract: | This paper studies the effects of infrastructure sharing agreements on telecommunications markets. Using a model with an investment stage where firms compete" 'a la Cournot", I find that, infrastructure sharing agreements increase investment at industry level. Indeed, the sharing of infrastructures reduces costs of investment for involved operators and encourage them to invest more. This holds except if involved operators are much less efficient than their competitors (i.e., they have much higher marginal costs before investment). Furthermore, infrastructure sharing agreements generally increase both investments and consumer surplus, except if involved operators are much less efficient than their competitors or if they have very different level of efficiency. The infrastructure sharing agreement is even more effective when the most efficient operators are involved. |
| Keywords: | Mobile telecommunications,network sharing,competition,consumer welfare |
| JEL: | L40 L96 L11 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse22:265636&r=reg |
| By: | David Martimort (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, EHESS - École des hautes études en sciences sociales); Guillaume Pommey (Università degli Studi di Roma Tor Vergata [Roma]); Jerome Pouyet (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université, ESSEC Business School - Essec Business School) |
| Abstract: | Modern airports provide commercial services to passengers in addition to aeronautical services to airlines. We analyze how the airport's market power impacts the pricing of services when the airport also invests in the quality of its infrastructure. There is a need to regulate the airport and the optimal regulation can be implemented with a price-cap and a subsidy scheme targeted to the investment. The choice between a single-till and a dual-till approach does change neither the optimal regulation nor its implementation. We also investigate the consequences on the optimal regulation of the nature of the airport-airline relationship and of the observability of investment. |
| Keywords: | airports,regulation,commercial services,investment |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03328394&r=reg |
| By: | Rosa Branca Esteves (Universidade do Minho and NIPE); Francisco Carballo-Cruz (Universidade do Minho and NIPE) |
| Abstract: | This paper investigates the role of an incumbent´s data investment decisions in shaping the competitive interaction of firms and market structure. We provide antitrust agencies with some insights that may help them to determine whether and when personalized pricing (PP) by a dominant firm, which is enabled by the use of exclusive data, dampens competition and harms consumers. In markets with intermediate entry costs, where entry is blocked without any intervention, a data openness remedy, by means of a mandatory information sharing, is an effective tool to restore competition and boost consumer welfare. Even in markets where entry is inevitable, due to low entry costs, a mandatory information sharing to promote competitive PP further boosts consumer surplus in comparison to the case where only the incumbent employs PP. In contrast, public agencies should consider a ban on PP in markets with sufficiently high entry costs. In these markets, a mandatory information sharing remedy would simply not produce the desired competitive outcome. |
| Keywords: | Price discrimination, data investments, data barrier to entry, information, sharing, digital markets, GDPR, competition policy and regulation. |
| JEL: | D43 L13 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:16/2021&r=reg |
| By: | Bahia, Kalvin; Castells, Pau |
| Abstract: | We evaluate the impact of competition on investments in Europe's mobile communications market during the 2011-2021 period. There are stark and sustained differences in market outcomes between three- and four-player markets in Europe, and economic theory suggests these could be partly explained by the dynamic effects of competition on the ability and incentives to invest by market players. We find strong evidence that market concentration in Europe is below optimal levels that would maximise investments, especially in four-player markets. The dispersion of fixed costs and assets among a greater number of players can result in diseconomies of scale and a less efficient use of resources. We also find evidence that investment incentives to improve quality and innovate are lower in markets with lower concentration indices and profit margins. |
| JEL: | K20 L10 L40 L96 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse22:265614&r=reg |
| By: | Krämer, Jan; Shekhar, Shiva; Hofmann, Janina |
| Abstract: | Algorithmic learning gives rise to a data-driven network effects, which allow a dominant platform to reinforce its dominant market position. Data-driven network effects can also spill over to related markets and thereby allow to leverage a dominant position. This has led policymakers to propose data siloing and mandated data sharing remedies for dominant data-driven platforms in order to keep digital markets open and contestable. While data siloing seeks to prevent the spillover of data-driven network effects generated by algorithmic learning to other markets, data sharing seeks to share this externality with rival firms. Using a game-theoretic model, we investigate the impacts of both types of regulation. Our results bear important policy implications, as we demonstrate that data siloing and data sharing are potentially harmful remedies, which can reduce the innovation incentives of the regulated platform, and can lead overall lower consumer surplus and total welfare. |
| Keywords: | Data-driven network effects,algorithmic learning,regulation,data sharing,data siloing |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse22:265645&r=reg |
| By: | Aravantinos, Elias; Petre, Konstantin; Katsianis, Dimitris; Chipouras, Aris; Varoutas, Dimitris |
| Abstract: | The price paid today for broadband bundling, is determined by a number of factors, such as broadband speed, premium content, inclusive call allowances, any value-added services, and it is important that people understand their usage requirements so they can identify the one that suits their need We found strong evidence that bundling proves to have a strong effect on tariffs, a dominant operator's strategy during the study's period, 2014-2020, allowing to allocate fixed costs across a range of services. Download Speed is positively significant to tariffs and increases broadband prices, such as a 10% increase in speed raises broadband prices by around 1.4%. Although broadband prices drop around 6.9%, operators emphasize their efforts to charge higher prices on TV bundles, specifically on plans combining broadband, voice telephony and TV that are 54% more expensive over standalone's plans, compared to the 36% of a previous 2014 study. Incumbents charge higher tariffs, around 20.1% compared to the new entrants, in an effort to pay off the fiber network deployment investments, as coverage continues to grow. |
| Keywords: | Hedonic prices,Bundling,Tariffs,Broadband,European Union,Regulation |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse22:265611&r=reg |
| By: | Gorecki, Paul |
| Abstract: | The Competition and Consumer Protection Commission (CCPC) allegations of price signalling in 2015 and 2016 by five insurers, a broker, and a broker representative body with respect to private motor insurance (PMI) premium increases did not reach, based on publicly available information, the threshold required to establish a concerted practice that breached competition law. There was a plausible alternative explanation, the underwriting cycle, for the premium increases. The failure of the CCPC to articulate a clear position on when public announcements on future prices are likely to breach competition law is likely to chill competition and damage consumer welfare. Had the CCPC investigated the alleged price signalling under the Competition (Amendment) Act 2022, which implements the ECN+ Directive, there is no reason to assume that the outcome would have been any different, despite extra powers such as civil fines. |
| Keywords: | private motor insurance; Competition Act 2002; Competition (Amendment) Act 2022; concerted practice; tacit collusion; Competition and Consumer Protection Commission; price signalling. |
| JEL: | D22 D43 G22 K21 L13 L41 |
| Date: | 2022–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:115473&r=reg |
| By: | Bouvard, Matthieu; Casamatta, Catherine; Xiong, Rui |
| Abstract: | We show that by lending to merchants and monitoring them, an e-commerce platform can price-discriminate between merchants with high and low financial constraints: the platform offers credit priced below market rates and designed to select merchants with lower capital or collateral while simultaneously increasing the platform’s access fees. The credit market then becomes endogenously segmented with banks focusing on less financially constrained borrowers. Lending by the platform expands with its monitoring efficiency but can arise even when the platform is less efficient than banks at monitoring. Platform credit benefits more financially constrained merchants as well as buyers, but can hurt less financially constrained merchants if cross-side network effects with buyers are too small. The platform’s propensity to offer credit and the financial inclusion of more constrained merchants depends on the platform’s market power. |
| Keywords: | Big Tech; banks; two-sided markets; financial constraints; financial inclusion;; market power |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:127518&r=reg |
| By: | Coffey, Bentley; McLaughlin, Patrick (Mercury Publication) |
| Abstract: | We estimate the effects of federal regulation on value added to GDP for a panel of 22 industries in the United States over a period of 35 years (1977–2012). The structure of our linear specification is explicitly derived from the closed-form solutions of |
| URL: | http://d.repec.org/n?u=RePEc:ajw:wpaper:06863&r=reg |
| By: | Ellig, Jerry; Bull, Reeve (Mercury Publication) |
| Abstract: | Regulatory agencies often produce mediocre economic analysis to inform their decisions about major regulations. For this reason, Congress is considering proposals that would require regulatory agencies to conduct regulatory impact analysis and subject it |
| URL: | http://d.repec.org/n?u=RePEc:ajw:wpaper:03539&r=reg |
| By: | Arcos, MTeresa; Feijóo, Claudio |
| Abstract: | Boundaries set between legacy audiovisual and digital content services are blurring nowadays. However, the legal framework applicable to those services is still rather different to such an extent it is recognized as divergent, particularly regarding the liability regime of the service providers. Among the examples of these distinct regimes, the protection for minors with access to potentially harmful content regarding their moral and mental growth is used in the paper to analyse the lack of coherence in the legal treatment of audiovisual content, in the EUin particular. From the analysis, the paper concludes that the Digital Services Act, as the latest step in theevolution of the legal framework for the digital services in the EU still seems unable to restore the required level of coherence and level the playing field for audiovisual content. and, therefore, lacks content-neutrality from the perspective of technology used for the distribution of content. Therefore, the paper foresees that more legislative initiatives will be needed to avoid the negative effects of the difficulties of existing audiovisual legislative framework enforcement and perceived lack of trust in law. |
| Keywords: | digital services regulation,audiovisual regulation,neutrality,content-neutrality,technology-neutrality European audiovisual market,Digital Single Market,liability intermediaries,AVSMD,DSA,harmful content,minors |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse22:265612&r=reg |
| By: | Chambers, Dustin; McLaughlin, Patrick (Mercury Publication) |
| Abstract: | Using RegData and the Statistics of US Businesses (SUSB), we seek to estimate the relationship between the rate of new industry-specific regulatory restrictions and the corresponding quantity and distribution of firms within each industry. Business data |
| URL: | http://d.repec.org/n?u=RePEc:ajw:wpaper:09458&r=reg |
| By: | Knieps, Günter |
| Abstract: | The transition towards 5G-based smart network industries is concomitant with a fundamental change of the traditional physical infrastructures driven by digitalization which pervades all decision-relevant components of the infrastructure value chains. The goal of this paper is to develop a network economic foundation for 5G based network slicing based on a generaliza-tion of the concept of virtual networks combining a required sequence of virtual networks in order to fulfill the necessities of smart network industries. Whereas interoperability and inter-connection between different virtual networks are not standardized significant standardization efforts via network slicing can be observed in particular from the perspective of end-to-end QoS guarantees. 5G-based big data use cases with cross-border challenges for network slic-ing, and the subsequent interoperability of virtual networks, enable tremendous potential for innovation in smart physical infrastructures. The 5G-based European Future Railway Mobile Communication System (FRMCS) and cross-border oriented, 5G-based connected, coopera-tive, and automated mobility applications (CCAM) are investigated with a large and open set of heterogeneous use cases begging for cross-border standardization of QoS-differentiated network slices. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse22:265644&r=reg |
| By: | Chambers, Dustin; Collins, Courtney (Mercury Publication) |
| Abstract: | While several scholarly papers have documented potential costs associated with the burden of federal regulations, none have provided a comprehensive empirical analysis of the effect of regulations on consumer prices. This study examines the relationship b |
| URL: | http://d.repec.org/n?u=RePEc:ajw:wpaper:06871&r=reg |
| By: | Vander Maelen, Carl |
| Abstract: | In the wake of the 'new governance' school of thought, the EU has increasingly relied on soft law instruments that include a large number of (non-political) stakeholders into the policy process. Codes of conduct are such instruments. They have traditionally been used in EU law in a wide but inconsistent variety of ways. This makes it hard to summarise their legal characteristics. However, a clearer picture emerges in the sub-field of EU personal data protection. The question then becomes whether the use of codes in articles 40-41 GDPR presents a paradigm shift in how codes are used in EU law. Although embedding codes within the EU's hard law instruments is not new, this contribution argues that GDPR codes display unique features across their functional dimensions (implementation, accountability, and enforcement) and the dimensions of legalisation (obligation, precision, and delegation). The paper ends by framing these findings within the larger context of increasingly 'hard' EU soft law and the specific phenomenon of 'GDPR mimesis' in the EU's ICT policy. |
| Keywords: | Codes of conduct,Article 40 GDPR,Article 41 GDPR,Soft law,Audiovisual Media Services Directive,Digital Services Act,Artificial Intelligence Act |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse22:265672&r=reg |
| By: | Eltges, Fabian; Fourberg, Niklas; Wiewiorra, Lukas |
| Abstract: | Consumer sided demand migration from legacy to fibre telecommunication technologies is a key challenge in today's economic policy. We adapt Chen and Riordan (2007) Spokes Model of spatial competition to capture a duopolistic multi-product firm setting in which an incumbent operator and an entrant firm simultaneously offer both a fibre and a copper based product. Consumer preferences are uniformly distributed over the preference space consisting of four spokes (2 products of 2 suppliers). The novelty of our approach is that we allow for a per-unit access fee which is paid by the entrant to the incumbent as prerequisite for offering its own copper based end-user product. Using the access fee as a strategic variable for either the incumbent or a regulating social planner, we compare different scenarios to investigate its role as a potential instrument to induce copper to fibre migration. We find that the access fee acts as an asymmetric cost pass-through for the entrant to promote its fibre product at the expense of its copper access. Furthermore, the socially optimal fee will be either identical to the private solution or smaller, if consumer preferences are strong. If one considers demand for fibre products as the desired objective, our results suggest that the privately chosen access fee already implies full copper to fibre migration. However, if a social planner is responsible for setting access fees, the fee can be utilised to increase demand for fibre products beyond the socially (welfare) desirable level. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse22:265623&r=reg |