Seminar – Natural Monopoly in Delivery Services

Professor Sean Ennis, Director of the Centre for Competition Policy, Professor of Competition Policy, UEA Norwich Business School

This paper focuses on whether a natural monopoly activity may have lower costs after the entry of a competitor. One feature of natural monopolies – specifically the incumbent’s costs relative to the efficient frontier – is not fully explored in the traditional definition. The characteristics of this relation in the delivery sector suggest a natural modification to the definition. While postal delivery is often characterised as a natural monopoly, under realistic conditions entry may reduce total costs of delivery. Capturing this feature in a modified definition of natural monopoly has high policy relevance at a time when digitalisation is reducing letter volumes and package delivery grows. Ironically, postal incumbents with low volumes, often perceived to merit the most legal and financial protections from competition, may, in fact, merit the fewest.

Speaker bio

Currently Director of the Centre for Competition Policy and Professor of Competition Policy at UEA’s Norwich Business School, Professor Sean Ennis has extensive experience in government work and competition law and policy. Previously, he was a senior economist in the Competition Division of the OECD, executive director of the Competition Commission of Mauritius, an economist at the European Commission’s DG Competition and an economist at the US Department of Justice’s Antitrust Division. He has published research studies and reports and provided capacity building related to a broad range of business activities (including digitalisation, communications, health care, financial and professional services). These studies or statements have been submitted to or published by economics journals and organisations such as the European Parliament, the G20, the OECD and the World Bank. He has coauthored or overseen reports for regulatory and government agencies in Australia, Greece, Mexico, the Philippines, Romania, the United Kingdom and the United States. He has been involved in competition law and regulatory proceedings including with the European Commission, the US Department of Justice and the US Federal Communications Commission.