Thursday, July 05, 2007

Unit 2: Market dominance and government action: Telefonica

The European Commission has fined Spain's Telefonica $207m [£102.5m) for stifling competition in the broadband internet market says this BBC article/clip

a) How has Telefonica demonstrated market dominance and why is this an example of market failure?
b) How likely is the fine to overcome the market failure?
c) What alternative approach could the EU have taken to overcome the market failure?

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