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1 e-Conomics 2015 - 2020 2015-2020 Conomics Lustrum Magazine e-Conomics 2015 - 2020 Preface This magazine celebrates the five-year anniversary of e-Conomics with a series of articles and interviews with clients and partners of e-Conomics. e-Conomics is a competition and strategy boutique with a strong focus on telecom and digital markets. The articles and interviews give the reader a detailed overview our versatile and fascinating field of work. We are grateful and consider it a token of appreciation that so many of our clients and partners have participated in the production of this magazine and thereby joined the celebration of our five-year milestone. Finally, we thank Daniëlle van der Schoot and the team of Ngrane to make this magazine possible. Thank you and enjoy reading! Nicolai van Gorp (founder/owner of e-Conomics) e-Conomics 2015 - 2020 e-Conomics 2015-2020 Telecom Joint dominance in Dutch telecoms Interview: Freshfield Telecom regulation in Belgium Interview: Jones Day Symmetric Access obligations Interview: Liberty Global Interview: Incyte Consulting 2-8 Inside e-Conomics An interview with Nicolai van Gorp Founder/Owner of e-Conomics Digital Economy Competition issues in digital markets Interview: Ministry of Economic Affairs Interview: Radicand Economics Digital Business Models Interview: Heijmans Interview: Nyenrode Regulating Data Interview: Ngrane 9-16 e-Conomics 2015 - 2020 1 Nicolai van Gorp Nicolai van Gorp is founder and owner of e-Conomics. He is a competition economist with a passion for telecoms and digital markets. He is author of influential EU studies on competition and regulation in telecom markets and he contributed substantially to the policy debate in the Netherlands and the EU on regulation of digital platforms. He is in- house digital strategist at Ngrane and provides executive training at Nyenrode Business University and the National Academy for Finance and Economics. Why telecoms and digital markets? 12 years ago, I was involved in an evaluation of the Dutch telecom law and a study into allocation mechanisms for radio spectrum. These studies sparked a fascination about the interaction between technology and economics. Two years later, I wrote a paper about spectrum auctions for KPN together with my colleagues Marcel Canoy and Eric Canton. This paper was presented in a room filled with stakeholders who then realized that we know a thing or two about telecom. So, the next morning we received several phone calls from parties including Tele2 and Vodafone to support them in litigation. At the same time, we were successful in winning European tenders for telecom related studies for the European Commission. Before you know it, you have entered a self-reinforcing cycle in which every project receives a spin-off. After about five years, that process went towards digital platforms and I suddenly became an expert in that field as well. The latter sounds like I was adrift, but that is far from the truth. I have always had the luxury to be able to choose. This partly results from the demand for my expertise, but also because of the multi-disciplinary character of the e- Conomics network which allows us to execute practically any project that relates to regulation and strategy in telecoms and digital markets. We never have to say ‘no’ to a client. 1 Inside e-Conomics Daniëlle van der Schoot e-Conomics 2015 - 2020 2 What is e-Conomics? e-Conomics is a small company with a large network. Over a period of five years, the competition and regulation practice expanded to include competition issues in digital markets, next to telecom regulations. A new practice has been added that provides executive training and internal workshops on platform business models & strategy. The company’s network includes engineers, lawyers, economists, and business analysts. Over the years we have worked with many different experts. But eventually, you end up with a group that you can trust blindly. We know where to find each other when we need each other, and everything is project related. That goes very smoothly. The company is lean and versatile at the same time such that we never have to say "no" to a client. If we can't do the job, we'll find someone who can. This is quickly and easily done via the network. And it also means that we can take more risks because there is always someone who has your back. In principle, we never work alone on a project. I always make sure that there is someone who looks over your shoulder, who reads along and is a sparring partner, or who can take over when you become ill (which is of course also very important for the client). e-Conomics 2015 - 2020 3 So, it’s technology that interests you? It is not so much technology that I am interested in, but more the business models - and especially business models that are not standard. Technology often has a major impact on how business models work, but there are other factors as well. For example, technology plays hardly any role in sports markets, yet the business models of a football club are completely differently from those of normal companies. This translates into a perverse form of competition. I became fascinated by this during my studies. I wanted to know everything about the economics of sports and ended up writing my final thesis on the collective sale of broadcasting rights of football matches and whether this is compatible with EU antitrust law. I have a similar fascination with digital platforms. These digital business models are totally different from traditional business models, which means that the market also functions differently. Coincidentally, technology has a major influence here, but the main driving force behind my fascination is the anomaly of the digital economy and the concerns this raises from a competition policy point of view. What triggered this move to digital platforms? That happened quite naturally; like for many other economists, lawyers and policy makers who dealt with telecom. We all started to focus on digital platforms. This made sense because the digital economy is happening on top of those broadband networks. So, it has been a very natural transition. But all this background in telecom regulation is ultimately not that relevant, because the business models differ greatly, and digital markets also function differently. A digital platform is like a government that tries to maximize value creation (on the platform) and then levies a tax. If you look at a platform in this way, you see that the business model differs from regular business models, including those of telecom companies. Unfortunately, not everyone is aware of this difference and you now see a trend among politicians and policymakers that want to regulate platforms following the example of the telecom sector. In my view, this is a misconception and is not going to work. The telecom sector is a sector that is dynamic, but the boundaries of the market are clear. Anyone active in that sector must adhere to sector-specific rules and they may be subject to special rules depending on their market position. However, digital platforms are not a sector, they are business models. You cannot set up sector regulation for a particular business model. Some business models may be "suspicious," but you must always judge them in the context of their competitors. However, it is not at all clear who these competitors are! This is because digital companies challenge each other from across traditional market boundaries: Google Search competes with Amazon Shopping. e-Conomics 2015 - 2020 4 We currently lack a robust analytical framework to assess these dynamics, and without such framework it is impossible to develop a rigorous regulatory framework. You can expect that any decision will, to fullest extent, be challenged before court. Moreover, decision will need to be reviewed frequently to reflect the rapidly changing market reality, and these reviews will in turn be challenged in court. This may be good for our business, but not for society at large. Then, why do you advo- cate this message? We can’t afford to advocate messages that serve our own interests. Neither can we afford to advocate messages that only serve our clients. This would harm our credibility and kill our business in the long run. In our line of business, we are constantly faced with this dilemma. The core message that I convey regarding telecom regulation, for example, is to abolish it when it is no longer necessary. “ ” Many of your customers and partners praise you for your ability to explain a complex subject in clear language and with practical examples Do you recognize yourself in that feedback? I think that is a great compliment, because it has always been a challenge for me to explain a complex issue once I have understood it myself. Where to start? I've had that from an early age, and I recognize it in my children too. They get excited about something they understand, but then start their story halfway through because they assume that the other person already knows the beginning. I had that very strongly myself and I gradually learned how to start at the beginning, but to avoid the story becoming tedious. That has been a learning process, and I am still conscious of it. Apparently, I managed to turn my natural weakness into a strength. It is nice to hear that people notice this and that they appreciate it. e-Conomics 2015 - 2020 5 And I think it is no longer necessary in the Netherlands. The ACM and the Dutch government disagree, but if they were, I would be out of work. But any business is finite in the end, which is only a problem if your next business is not yet up and running when that moment comes. Is your next business up and running already? It’s coming about. There is much demand for strategic advice on digital platforms, and our brand is gradually establishing itself. Since we started working on digital platforms, we have advised beverage distributors, construction companies, job platforms, and platforms for making homes more sustainable. In collaboration with Ngrane (an Amsterdam based digital agency) we aim to scale up these services by complementing each other: we explain companies on how to develop a sound business model for a digital platform, Ngrane subsequently designs the user interfaces and builds the platforms for these clients. What lessons have you learned while developing this new market? I have experienced is that developing unknown territory is a matter of patience, and that an intrinsic interest helps you to stay motivated and feeds your creativity. This prevents you from stopping if ideas do not immediately go as planned. If you enjoy what you do, you see failure less as failure and more as a learning experience that leads to other opportunities. For example, Paul (De Bijl) and I have been teaching executive courses at Nyenrode about digital business models since 2017. At first, we thought we could turn this into a lucrative service as there is a lot of demand for these knowledge sessions. But you need an organisation like Nyenrode with all its overhead to organise and market these sessions. It soon became clear that our return on investment does not come in monetary value, but in terms of a diverse audience of managers and entrepreneurs that approach us afterwards to talk further. As a result, Paul and I have been invited by many organisations to arrange in-house knowledge sessions and workshops. Today, we advise various companies on how to gain control over their sectors by means of a platform, we help Ngrane customers to better understand the business model behind an app, and we advise the government on how to design a platform for making homes more sustainable. We could not have done these projects without those lectures at Nyenrode. So, these educational activities eventually took on a completely different business model than we initially envisioned. What is on the agenda for the next 5 years? We have advised companies from traditional sectors on how to turn those sectors upside down by means of a digital platform. But so far, we are not structurally involved in the development of such a platform. Once we have given our advice to the boardroom, we're done. I would like to change that and stay involved e-Conomics 2015 - 2020 6 on a more structural basis. The nice thing about a digital platform is that it is a living concept that starts simple, but then you add some additional services, and it continues to evolve in ways you might not have foreseen. This fits with my philosophy of how to make a living. What are moments to be proud of? I am proud of five years independence and of my friends that accompany me in this adventure. I am proud and joyful about that, but it is not a moment. A moment of flowing endorphins took place early 2020 when we won a court case together with VodafoneZiggo and Freshfields. We have supported VodafoneZiggo since 2017 in refuting ACM's arguments to regulate cable networks. Over a period of three years, we provided various inputs to questions such as: Is there a business case for VodafoneZiggo to provide wholesale access to its network? How should the relevant market be defined? Do VodafoneZiggo and KPN jointly have a dominant position? In 2020, there finally was a court decision in which the judge overturned ACM's decision with explicit reference to our analyses. That was a moment to be proud of. That was the icing on the cake. “ ” A moment to be proud of was the victory with VodafoneZiggo in the Joint Dominance case against ACM. That was the icing on the cake. Next >