At the beginning of June our directors Linda Gratz and Hans W. Friederiszick gave a presentation at the 2024 Hal White Antitrust Conference. This event was organised by our US partners Bates White Economic Consulting.
Our directors spoke about bargaining power in the bilateral negotiations between carriers and large Content and Application Providers (CAPs) over IP data transport fees.
In a recent legal dispute between Meta and Telekom Deutschland GmbH, Meta stopped paying fees while continuing to use a dedicated direct network connection into Telekom’s network, with both parties accusing each other of abusing a dominant position.
In this context, our company analysed the relative bargaining power of carriers and CAPs in the bilateral negotiations over fees for IP data transport.
We concluded that carriers technically cannot deny access to their network. Furthermore, large CAPs can deliberately cause congestion at interconnects into a carrier’s network, thereby temporarily deteriorating the connection quality in the network. Consequently, a significant imbalance in the relative bargaining power in favour of large CAPs can arise.
The dispute between Meta and Telekom could become a precedent for establishing whether CAPs must pay for using dedicated direct connections to carrier’s networks and contribute their share to the necessary investment into Next Generation Networks.
We thank Bates White for inviting us to speak at the conference. Thank you also to our clients for the opportunity to share our analysis and engage in such an important discussion.
