Dynamic Vertical Foreclosure

This paper argues that a cable operator with sufficient market power in the downstream multi-channel video programming distribution (MVPD) market can deny access to unaffiliated programmers, resulting in an upstream programming rival's exit or impaired dynamic efficiency. Further, market dominance by cable operators may harm consumers of video programming through higher prices and less choice in the downstream MVPD market. The reason is that as unaffiliated video programming becomes affiliated programming, the latter is then withheld from rival MVPDs. This analysis is then applied to the recent acquisition of Adelphia by Comcast and Time Warner.

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Equilibrium Vertical Foreclosure with Investment

SSRN Electronic Journal ◽

10.2139/ssrn.15102 ◽

1997 ◽

Author(s):

Sang-Seung Yi

Keyword(s):

Vertical Foreclosure

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Part III Tests of Abuse, 8 The Consumer Harm Test

The Foundations of European Union Competition Law ◽

10.1093/law-ocl/9780199226153.003.0008 ◽

2011 ◽

Author(s):

Nazzini Renato

Keyword(s):

Intellectual Property ◽

Property Rights ◽

Social Welfare ◽

Intellectual Property Rights ◽

Product Innovation ◽

Consumer Welfare ◽

Competition Rules ◽

Vertical Foreclosure

This chapter studies the consumer harm test. The consumer harm test asks whether the conduct of the dominant undertaking results in higher prices, lower output, or reduced product innovation. The test is not necessarily the manifestation of a consumer welfare objective of the competition rules but is consistent with the achievement of long-term social welfare. Therefore, the test may be applied under Article 102 even if this provision does not aim at maximizing some measure of consumer welfare but long-term social welfare. The chapter then looks at the consumer harm test in vertical foreclosure, focusing on refusal to supply and margin squeeze. Proof of consumer harm is required in all vertical foreclosure cases and not only when the refusal to supply relates to intellectual property rights.

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Welfare Implications of Deviation from Network Neutrality

Research, Practice, and Educational Advancements in Telecommunications and Networking ◽

10.4018/978-1-4666-0050-8.ch006 ◽

2012 ◽

pp. 108-131

Author(s):

Emin Koksal

Keyword(s):

Social Costs ◽

The Internet ◽

Network Neutrality ◽

Internet Service ◽

Market Structures ◽

Total Surplus ◽

Welfare Implications ◽

Almost All ◽

Vertical Foreclosure ◽

Policy Proposals

This paper investigates how incentives of network operators to deviate from neutrality may create social costs or benefits in different market structures. The deviation from network neutrality is a general form of discrimination based on charging different prices for non-affiliated content and application providers. In this paper, deviation from network neutrality is formulated as a form of vertical foreclosure. While constructing the model two-sided nature of the internet service, the providing market is considered. The author found that, although monopoly network operators have no incentive to deviate from neutrality, the duopoly network operators have this incentive. Welfare analysis suggests destructive results for almost all participants, hence the total surplus in both market structures. In addition, the analysis for the degree of integration between the network operators and their affiliated content and application providers, suggest some policy proposals to discourage their degree of integration.

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