It is common for a vertically integrated firm to supply an essential wholesale facility to other firms against which it competes at the retail level. The firm may obtain commercially sensitive information in the course of providing the wholesale service, which it may use at the retail level for marketing purposes. This can place a potential entrant at a substantial competitive disadvantage.
Figure 1: Responding to misuse of information
Remedies for misuse of information are generally ex ante in nature, and include:
- Establishing strict rules or procedures governing the use or disclosure of commercially sensitive information, and setting limits on the sharing of sensitive information between a carrier and its affiliates
- “Win back” rules, limiting the extent to which the vertically integrated firm may directly market to customers that choose to switch to a competitor.
RELATED INFORMATION
Misuse of Information