The exclusion of competing one-way essential complements: implications for net neutrality

[en] We analyze the incentives of internet service providers (ISPs) to break net neutrality by excluding competing one-way essential complements, i.e. internet applications competing with their own products. A typical example is the exclusion of VoIP applications by telecom companies offering internet and voice services. A monopoly ISP may want to exclude a competing internet app if it is of inferior quality and the ISP cannot ask for a surcharge for its use. Competition between ISPs never leads to full app exclusion but it may lead to a fragmented internet where only one ISP offers the application. We show that, both in monopoly and duopoly, prohibiting the exclusion of the app and surcharges for its use does not always improve welfare.

Research center :

LCII - Liège Competition and Innovation Institute - ULiège

Disciplines :

Microeconomics

Author, co-author :

Broos, Sébastien ; Université de Liège > HEC Liège : UER > Economie industrielle

Gautier, Axel ; Université de Liège > HEC Liège : UER > Economie industrielle

Language :

English

Title :

The exclusion of competing one-way essential complements: implications for net neutrality

Publication date :

May 2017

Journal title :

International Journal of Industrial Organization

ISSN :

0167-7187

eISSN :

1873-7986

Publisher :

Elsevier Science

Volume :

Pages :

358-392

Peer reviewed :

Peer Reviewed verified by ORBi

Additional URL :

http://www.sciencedirect.com/science/article/pii/S0167718717301972

Name of the research project :

ARC Competition and Innovation

Available on ORBi :

since 06 March 2017

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