Functional separation within the European Union: Debates and challenges

Tropina, Tatiana; Whalley, Jason; Curwen, Peter

doi:10.1016/j.tele.2009.09.001

Cited by 15 publications

(4 citation statements)

References 14 publications

(8 reference statements)

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“…Data silos: To constrain scale and scope advantages, regulators may require integrated firms to keep data from various sources separated and to store it in data silos, thus barring firms from aggregating and combining data across services. This can be viewed as a form of functional separation regulation (Tropina et al, 2010). A less severe regulatory intervention would prohibit aggregation of data sources unless consumers give their consent (see Bundeskartellamt (2019) v. Facebook).…”

Section: Regulation Of Data-driven Market Power and The Role Of It Ar...mentioning

confidence: 99%

Regulation of data-driven market power in the digital economy: Business value creation and competitive advantages from big data

Fast

Schnurr

Wohlfarth

2023

Journal of Information Technology

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Recent high-profile antitrust cases and policy proposals have put a spotlight on the relationship between firms’ access to big data and sustained competitive advantages in digital markets. In Europe, concerns about data-driven market power have led policy makers to propose far-reaching regulations of information technology (IT) in these markets. Despite the global policy relevance, the regulation of big data and its competitive effects has so far received little attention in information systems (IS) research. This article addresses this research gap by developing an overarching framework for future IS research on the role of IT for the regulation of data-driven market power. The proposed research framework builds upon a three-part analysis: First, we review the academic literature and show that there is extensive, although nuanced, empirical evidence for business value creation from big (user) data. Second, we draw on the resource-based view of the firm and recent policy reports to derive six facilitating factors that enable firms to establish market power based on sustained data-driven competitive advantages. Third, we characterize three regulatory approaches to govern market power and competition in data-driven digital markets: (i) empowering consumers, (ii) data openness and (iii) limiting data scale. For each of these approaches, we highlight the key role of IT artifacts in mediating the effect of regulatory rules on actual practice.

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Section: Regulation Of Data-driven Market Power and The Role Of It Ar...mentioning

confidence: 99%

Regulation of data-driven market power in the digital economy: Business value creation and competitive advantages from big data

Fast

Schnurr

Wohlfarth

2023

Journal of Information Technology

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“…Buehler, Schmutzler and Benz (2004) [18] find that vertical separation reduces upstream supplier's incentive for quality investment. Tropina, Whalley, Curwen (2010) [19] believed it can potentially reduce investment by both incumbents and new entrants. De Bijl (2005) [8] comes up with the same conclusion that investment incentive is largely diminished under vertical separation and thus should be used only when there is a bottleneck in local access and when other regulation is not available.…”

Section: Different Opinions Towards Functional Separationmentioning

confidence: 99%

Is Functional Separation the Right Policy Remedy to Break Telecommunications Monopoly and Improve Performance?

2021

FSST

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How to break fixed network monopoly and increase competition is a grinding yet controversial topic for the telecommunications sector. In the past two decades, functional separation between wholesale network and retail service was brought to the table by countries intended to promote a healthier telecommunications market. It was first implemented in the United Kingdom in 2005 and we have witnessed many other OECD countries follow suit. However, until now, there is still no empirical evidence on the effectiveness of this solution. This paper aims to fill this gap by using country-level panel data covering the period from 2002 to 2016 to empirically evaluate the impacts of functional separation on fixed telecommunications market using different estimation methods. Our results show that functional separation does not cause any negative impacts as some previous literatures concerned. Instead, it stimulates healthy development of fixed broadband market by significantly decreasing price level and significantly upgrading network quality. After controlling for endogeneity, our findings are still robust, in addition, our results also reveal that impacts of functional separation are related to the degree of functional separation. A higher degree of functional separation results in more positive performance of fixed broadband market.

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“…Telecommunications networks have sizeable economies of scale and scope enabling cost synergies which arguably are lost when separation of a single vertically-integrated operator is mandated (Gonçalves & Nascimento, 2010;Howell, Meade & O'Connor, 2010). It is subject to many of the same concerns about potential diminishing of investment incentives for both incumbents and entrants as access regulation, of which (in the primacy given to the development of services-based competition over infrastructure competition), it is the most extreme form (Tropina, Whalley & Curwen, 2010;Brito, Pereira & Vareda, 2011). Furthermore, under certain circumstances, even though separation eliminates discrimination, it is not guaranteed to increase welfare (Chikhladze &Mandy, 2009;Brito, Pereira & Vareda, 2010;Heatley & Howell, 2010a;2010b).…”

Section: Vertical Separation: Foreclosing Foreclosurementioning

confidence: 99%

“…Italy (Nucciarelli & Sadowski, 2010;Mancuso, 2012), and is considered favourably in several others (Tropina, Whalley & Curwen, 2010). After briefly experimenting with functional separation, New Zealand mandated full structural separation of its copper incumbent in 2011, as a condition of its participation in the government-subsidised Ultra-Fast Broadband project (Howell, 2012;2013).…”

Section: Vertical Separation: Foreclosing Foreclosurementioning

confidence: 99%

Separation Anxieties: Structural Separation and Technological Diffusion in Nascent Fibre Networks

Howell

2014

SSRN Journal

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Vertical separation of upstream network operations from downstream retail activities, as the most extreme form of access regulation, has long been considered a legitimate regulatory remedy against use of market power in upstream infrastructure markets to engage in price-and non-price discrimination to foreclose competition in downstream retail markets. However, the remedy is increasingly being mandated for new networks, sometimes before any investment has been made. This paper uses theories of General Purpose Technologies and regulatory economics to consider how vertical separationcompared to both access regulation and no regulation-poses challenges to the ability to maximise scale economies at the early stage of a network life-cycle. This

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Functional separation within the European Union: Debates and challenges

Cited by 15 publications

References 14 publications

Regulation of data-driven market power in the digital economy: Business value creation and competitive advantages from big data

Regulation of data-driven market power in the digital economy: Business value creation and competitive advantages from big data

Is Functional Separation the Right Policy Remedy to Break Telecommunications Monopoly and Improve Performance?

Separation Anxieties: Structural Separation and Technological Diffusion in Nascent Fibre Networks

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