Our colleague Arne Rogde Gramstad, together with Bjørn Hansen (USN) and Øystein Foros (NHH), has recently published the article “Stricter margin squeeze regulation to achieve nondiscrimination in digital markets” in the journal Information Economics and Policy.
Margin squeeze regulation is used, among other things, in telecommunications markets to lower entry barriers and thereby strengthen competition in enduser markets.
The article examines whether margin squeeze regulation can also be applied to digital markets. It finds that if such regulation becomes too strict (requiring a high margin for access buyers) it may actually weaken competition for end-users. A regulated access price cap may be more efficient than margin squeeze regulation, but this type of regulation also comes with its own challenges.
The article is open access and can be read here.
