Antitrust, Regulation and the Neutrality Trap

Friday, 17 April 2015
CEPS Special Reports
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EU Internet policy seems bewitched by the term ‘neutrality’, applied to networks and now search engines and other online platforms. Andrea Renda questions in this latest Special Report whether this is this a good way to protect end users.

Publication Series: CEPS Special Report   No. of pp: 23

Originally confined to the infrastructure layer, today the neutrality rhetoric is being expanded to multi-sided platforms such as search engines and more generally online intermediaries. Policies for search neutrality and platform neutrality are invoked to pursue a variety of policy objectives, encompassing competition, consumer protection, privacy and media pluralism. This paper analyses this emerging debate and comes to a number of conclusions. First, mandating net neutrality at the infrastructure layer might have some merit, but it certainly would not make the Internet neutral. Second, since most of the objectives initially associated with network neutrality cannot be realistically achieved by such a rule, the case for network neutrality legislation would have to stand on different grounds. Third, the fact that the Internet is not neutral is mostly a good thing for end users, who benefit from intermediaries that provide them with a selection of the over-abundant information available on the Web. Fourth, search neutrality and platform neutrality are fundamentally flawed principles that contradict the economics of the Internet. Fifth, neutrality is a very poor and ineffective recipe for media pluralism, and as such should not be invoked as the basis of future media policy. All these conclusions have important consequences for the debate on the future EU policy for the Digital Single Market.

Andrea Renda is Senior Fellow in the Regulatory Affairs research unit at CEPS. He is also Adjunct Professor at Luiss Guido Carli University, in Rome, and a Senior Research Fellow at the Luiss Law and Economics Lab.