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Antitrust Analysis for the Internet Upstream Market: a BGP Approach

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  • D’Ignazio, A.
  • Giovannetti, E.

Abstract

In this paper we study concentration in the European Internet upstream access market. Measurement of market concentration depends on correctly defining the market, but this is not always possible as Antitrust authorities often lack reliable pricing and traffic data. We present an alternative approach based on the inference of the Internet Operators interconnection policies using micro-data sourced from their Border Gateway Protocol tables. Firstly we propose a price-independent algorithm for defining both the vertical and geographical relevant market boundaries, then we calculate market concentration indexes using two novel metrics. These assess, for each undertaking, both its role in terms of essential network facility and of wholesale market dominance. The results, applied to four leading Internet Exchange Points in London, Amsterdam, Frankfurt and Milan, show that some vertical segments of these markets are extremely competitive, while others are highly concentrated, putting them within the special attention category of the Merger Guidelines.

Suggested Citation

  • D’Ignazio, A. & Giovannetti, E., 2005. "Antitrust Analysis for the Internet Upstream Market: a BGP Approach," Cambridge Working Papers in Economics 0554, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:0554
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    References listed on IDEAS

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    1. Werden, Gregory J & Froeb, Luke M, 1994. "The Effects of Mergers in Differentiated Products Industries: Logit Demand and Merger Policy," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 10(2), pages 407-426, October.
    2. Scheffman, David T & Spiller, Pablo T, 1987. "Geographic Market Definition under the U.S. Department of Justice Merger Guidelines," Journal of Law and Economics, University of Chicago Press, vol. 30(1), pages 123-147, April.
    3. Giovannetti, Emanuele & Ristuccia, Cristiano Andrea, 2005. "Estimating market power in the Internet backbone. Using the IP transit Band-X database," Telecommunications Policy, Elsevier, vol. 29(4), pages 269-284, May.
    4. Giovannetti, E. & Ristuccia, C.A., 2003. "Estimating Market Power in the Internet Backbone Using Band-X data," Cambridge Working Papers in Economics 0332, Faculty of Economics, University of Cambridge.
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    More about this item

    Keywords

    Network Industries; Internet; Market Concentration; Essential Facilities; BGP;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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