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Open Access Publications from the University of California

Innovation and Market Definition under the EU Regulatory Framework for Electronic Communications

  • Author(s): Madiega, Tambiama
  • et al.

This article provides with a thorough analysis of market definition under the EU regulatory framework for electronic communications. It is stressed that, under a forward-looking approach to market definition, demand-side substitution must address the competitive constraints imposed by the emerging services and that, in assessing supply substitution, regulators should take into account the likelihood of potential competitors to enter the market within a reasonable time frame. Accordingly, potential competition must be addressed in defining market (and not subsequently when assessing market power) whenever the financial ability and the profitability for potential competitors to enter the market is established. Assessing the constraints imposed by the emerging Voice over Internet Protocol (VoIP) services that are substitutable for traditional telephony is necessary to conduct a consistent market analysis and accurately apply ex ante regulation, especially given the development of bundling strategies.

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