IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v37y2015icp104-110.html

The political economy of margin squeeze liability in the Turkish telecommunications market: A comparative assessment

Author

Listed:
  • Benli, Erman
  • Emin-Benli, Hande

Abstract

This paper studies the increasing importance of margin squeeze issue in the Turkish telecommunications market with a comparative assessment. Recent literature does not provide enough insight into the political economy of margin squeeze. The ideological background of the countries dominates their margin squeeze policies. The socialist experience and ordoliberal ideologies affect European Union (EU)’s margin squeeze policy. The EU policy leads to endorse margin squeeze as a standalone liability and it becomes relevant to the regulation and competition law. Turkey is one of the follower of the EU policy. However, the EU margin squeeze size does not fit to Turkey. The EU perspective is not an appropriate politically because it leads to the risk of conflict of authority. This risk has not existed yet in the EU because the EU has a supranational structure that allows the EU Commission to act as a central planner. However, the risk of conflict of authority is politically significant because Turkey is a nation state that does not allow the administrative authorities to act as a central planner. The EU margin squeeze policy is also not suitable for Turkey in terms of economics. Since, the EU approach leads to waste of resources. On the other hand, United States (US) courts endorse margin squeeze as a regulatory instrument and irrelevant to the imposition of antitrust law. The US practice seems to be more suitable for Turkey because it eliminates the risk of conflict of authority and waste of resources. The new Turkish regulatory framework on margin squeeze is more compatible with the US practices. Although the Turkish practice has formed under the influence of the Deutsche Telekom, Telefonica and Teliasonera cases, new margin squeeze regulation allows to follow the Linkline and Trinko decisions to ensure consumer welfare rather than competitors’ profitability.

Suggested Citation

  • Benli, Erman & Emin-Benli, Hande, 2015. "The political economy of margin squeeze liability in the Turkish telecommunications market: A comparative assessment," Utilities Policy, Elsevier, vol. 37(C), pages 104-110.
    • Handle: RePEc:eee:juipol:v:37:y:2015:i:c:p:104-110
    DOI: 10.1016/j.jup.2015.06.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178715000363
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2015.06.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Salop, Steven C & Scheffman, David T, 1983. "Raising Rivals' Costs," American Economic Review, American Economic Association, vol. 73(2), pages 267-271, May.
    2. Demsetz, Harold, 1969. "Information and Efficiency: Another Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 1-22, April.
    3. Briglauer, Wolfgang & Götz, Georg & Schwarz, Anton, 2010. "Can a margin squeeze indicate the need for deregulation? The case of fixed network voice telephony markets," Telecommunications Policy, Elsevier, vol. 34(10), pages 551-561, November.
    4. Hans Theo Normann, 2011. "Vertical Mergers, Foreclosure And Raising Rivals' Costs – Experimental Evidence," Journal of Industrial Economics, Wiley Blackwell, vol. 59(3), pages 506-527, September.
    5. Cetin, Tamer & Oguz, Fuat, 2007. "The politics of regulation in the Turkish electricity market," Energy Policy, Elsevier, vol. 35(3), pages 1761-1770, March.
    6. Granitz, Elizabeth & Klein, Benjamin, 1996. "Monopolization by "Raising Rivals' Costs": The Standard Oil Case," Journal of Law and Economics, University of Chicago Press, vol. 39(1), pages 1-47, April.
    7. Mandorff, Martin & Sahl, Johan, 2013. "The Role of the 'Equally Efficient Competitor' in the Assessment of Abuse of Dominance," Konkurrensverket Working Paper Series in Law and Economics 2013:1, Konkurrensverket (Swedish Competition Authority).
    8. Gaudin, Germain & Saavedra, Claudia, 2014. "Ex ante margin squeeze tests in the telecommunications industry: What is a reasonably efficient operator?," Telecommunications Policy, Elsevier, vol. 38(2), pages 157-172.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jean J. Gabszewicz & Skerdilajda Zanaj, 2008. "Upstream Market Foreclosure," Bulletin of Economic Research, Wiley Blackwell, vol. 60(1), pages 13-26, January.
    2. Eva Wichmann, 2017. "Crucial Materials? How Export Restrictions Upstream Boost Manufacturing Exports Downstream," FIW Working Paper series 181, FIW.
    3. Cooper, James C. & Froeb, Luke M. & O'Brien, Dan & Vita, Michael G., 2005. "Vertical antitrust policy as a problem of inference," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 639-664, September.
    4. Tilman Klumpp & Xuejuan Su, 2015. "Strategic Investment under Open Access: Theory and Evidence," Journal of Industrial Economics, Wiley Blackwell, vol. 63(3), pages 495-521, September.
    5. Tan Ngoc Vu & Duc Hong Vo & Michael McAleer, 2019. "Rent seeking for export licenses: Application to the Vietnam rice market," Documentos de Trabajo del ICAE 2019-13, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    6. Donna, Javier D. & Pereira, Pedro & Trindade, Andre & Yoshida, Renan C., 2020. "Direct-to-Consumer Sales by Manufacturers and Bargaining," MPRA Paper 105773, University Library of Munich, Germany.
    7. Barbara J. Spencer & Ronald W. Jones, 1991. "Vertical Foreclosure and International Trade Policy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 153-170.
    8. Kim, Jongwook & Mahoney, Joseph T., 2008. "A Strategic Theory of the Firm as a Nexus of Incomplete Contracts: A Property Rights Approach," Working Papers 08-0108, University of Illinois at Urbana-Champaign, College of Business.
    9. Richard Langlois, 2013. "The Institutional Revolution: A review essay," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(4), pages 383-395, December.
    10. Ludwig van den Hauwe, 2005. "Public Choice, Constitutional Political Economy and Law and Economics," Method and Hist of Econ Thought 0508001, University Library of Munich, Germany, revised 09 Aug 2005.
    11. R. L. Jones & K. R. Page, 1981. "Market Failure and Superannuation — A Comment," The Economic Record, The Economic Society of Australia, vol. 57(1), pages 86-88, March.
    12. Michelle R. Garfinkel & Stergios Skaperdas & Constantinos Syropoulos, 2009. "International Trade and Transnational Insecurity: How Comparative Advantage and Power are Jointly Determined," Working Papers 080921, University of California-Irvine, Department of Economics.
    13. Robert Tartarin, 1987. "Efficacité et propriété," Revue Économique, Programme National Persée, vol. 38(6), pages 1129-1156.
    14. Kaufmann, Lutz & Roessing, Soenke, 2005. "Managing conflict of interests between headquarters and their subsidiaries regarding technology transfer to emerging markets--a framework," Journal of World Business, Elsevier, vol. 40(3), pages 235-253, August.
    15. Allain, Marie-Laure & Chambolle, Claire & Rey, Patrick & Teyssier, Sabrina, 2021. "Vertical integration as a source of hold-up: An experiment," European Economic Review, Elsevier, vol. 137(C).
    16. Michel Glais, 1996. "Les entreprises de grande taille face au droit communautaire de la concurrence Application au cas des multinationales de l'agro-alimentaire," Économie rurale, Programme National Persée, vol. 231(1), pages 47-55.
    17. Vaubel, Roland, 2003. "Principal-Agent-Probleme in internationalen Organisationen," HWWA Discussion Papers 219, Hamburg Institute of International Economics (HWWA).
    18. Mehrdad Vahabi, 2025. "Introduction: A Special Issue in Honouring Janos Kornai," Palgrave Studies in the History of Economic Thought, in: The Legacy of Janos Kornai, chapter 0, pages 31-48, Palgrave Macmillan.
    19. Xin Geng & Harish Krishnan & Maurice Queyranne, 2021. "Cost‐raising internalization in supply chain design," Naval Research Logistics (NRL), John Wiley & Sons, vol. 68(3), pages 295-311, April.
    20. Winston Harrington & Richard D. Morgenstern & Peter Nelson, 2000. "On the accuracy of regulatory cost estimates," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 19(2), pages 297-322.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:37:y:2015:i:c:p:104-110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.