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What if we apply Neutrality rules to the supermarket sector?

Post para el Policy blog sobre proyecto NN - SupermercadoToday, we publish the second research and findings elaborated by Solchaga Recio & Associates on how Net Neutrality provisions could change our lives if applied in other industries providing services that touch every consumer and are used daily by everyone.

 

The first case study focused on retailers and airlines. Now we are doing the same exercise but shifting to a different sector: general merchandise retailers and hypermarket chains. This is a great example given its similarities with ISPs. First of all, because both sectors provide goods / services that touch the daily life of consumers -food and broadband Internet-. Secondly, because both can also be considered operating in two-sided markets, i.e. delivering services and products produced by suppliers –farmers, manufacturers and petrol or content and services over the Internet- as demanded by their customers. And finally, because, both markets could be considered competitive markets in Europe, as customers can choose among various service providers.

 

We invite you to read this second research note that illustrates some of the possible consequences on the supermarket sector if we apply net neutrality rules as proposed for the Telco industry. In fact, the findings of the research of Solchaga Recio & Associates do not show an attractive scenario for consumers: food and fuel prices would increase, variety and quality of products would decrease and innovations such as white label products may have not made it into the markets.

 

Access here to this second case study to find out more on what could mean applying Net Neutrality rules in the supermarket sector for consumers’ welfare and market participants:

 

In this new case study, we confirm that regulating a competitive market to prevent potential misbehaviors is disproportionate and may lead to unintended consequences, reducing consumers’ welfare and hampering innovation. Indeed, why an apparently ludicrous idea for the hypermarket sector is considered as the best solution for keeping the Internet Open?

 

 

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Chema Alonso

Chief Data Officer, Telefonica.