Broadband from the stratosphere

HAPS (High Altitude Platform Stations) are flying objects in the stratosphere (approx. 20 km) that are kept geostationary and can cover areas with a diameter of 100 - 200 km with their antennas. With the appropriate equipment, they can be used for both mobile and stationary broadband services. Due to the relatively short latency times, they offer the possibility of providing very powerful broadband connections even in remote rural areas.

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Navigating the password jungle

Almost every day, internet users log in to various digital services. For authentication the majority of consumers continue to use a combination of an email address and an individually defined password.

Some consumers are particulary sceptical regarding social log-ins, which are single sign-on solutions provided by large digital platform providers. Most of their concerns relate to the security and reliability of these systems. Currently, only 13% of Internet users use social log-ins.

By comparison, consumers in Germany are open minded about the use of biometric authentication methods. Roughly 50% of Internet users already use biometric authentication methods. Today, they are mainly used to unlock digital devices. Internet users can, however, imagine using biometric features in other areas in the future as well.

Hence, the implementation of biometric authentication procedures is currently being pushed forward in other domains. One thing that needs to be carefully discussed, however, is the fact that a user's biometric characteristics are unique and immutable and therefore, unlike a compromised password, cannot be easily changed.

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Let’s stay home!

In the fifth edition of the research brief series on communication behaviour and media use in Germany, we present the latest survey results from 2020 on the use of internet-based communication and media services.

The research brief illustrates among others that consumers are still using both traditional as well as internet-based communication services in 2020. In total, about 5.4 different services are part of consumers' standard repertoire. This often includes traditional telecommunication services but also WhatsApp and email.

The use of Internet-based communication services is rarely associated with monetary costs, implying a low threshold for using several services in parallel. Our results suggest that multihoming is mainly stimulated by product differentiation and innovation as well as a heterogeneous circle of acquaintances and inhibited by strong network effects. Multihoming behavior may also be affected by the effort involved in using multiple services in simultaneously.

Multihoming of Internet-based media services, on the other hand, is rarer and less pronounced - especially in relation to video streaming services. Despite the growing willingness to pay, only a few consumers are subscribing to multiple video streaming services. However as providers are increasingly focusing on the production and marketing of exclusive content, contributing to a growing fragmentation of the content offering significant changes are to be expected in the future. It remains to be seen how the new services from Disney and others will position themselves on the market.

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Webinar Series ‘Mittelstand-Digital Spotlight: Blockchain’

The intensified public attention to the topic ‘Blockchain’ is not yet reflected in a higher implementation of blockchain-based solutions in German companies. This resulted from a representative survey for enterprises with 50 employees and more that was conducted by the association ‘Bitkom’. The outcome suggests that no significant progress in adopting the blockchain technology has been made across the German economy since 2018: At that time 86% of the interviewed companies stated that they had not yet engaged in the use of blockchain. In the latest results of the survey for 2021, this figure even rose to 87%.

Besides the lack of IT specialists, also limited financial resources inhibit the use of blockchain solutions in SMEs. Namely, the presence of this lack results in an increased risk aversion of SMEs and thus restricts their willingness to invest in future technologies that are subject to uncertainty. Therefore to demonstrate the economic benefits of blockchain solutions in an application-oriented manner, it is important to exemplify the advantages of this technology by means of real use cases.

On the basis of the organised three-part online event series ‘Mittelstand-Digital Spotlight: Blockchain’, the WIK-based accompanying research of the BMWi (Federal Ministry of Economics and Technology) funding priority ‘Mittelstand-Digital’ addresses exactly this identified lack of use cases. In each part of the series of events, after an introduction to the relevant topic by blockchain experts of the network ‘Mittelstand-Digital’, entrepreneurs will report on the use of blockchain in their companies. There will be an opportunity for exchange and networking after each appointment of the webinar series.

The following key topics will be addressed on the dates of the webinar series:

• Wed, 25.08, 16:00 - 17:30: Application-oriented introduction to blockchain technology

• Wed, 01.09, 16:00 - 17:30: Blockchain in logistics

• Wed, 08.09, 16:00 - 17:30: Blockchain in Industry 4.0

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Support study accompanying the evaluation of the Commission Notice on the definition of relevant market for the purposes of Community competition law

This study by VVA, LE Europe, WIK-Consult, WIFO and Grimaldi elaborates the principles and best practices for defining relevant markets that can be used in the evaluation of the European Commission's Market Definition Notice (MDN). The study identifies and describes such principles and best practices, organized by four focus areas:

1. Digitalization
2. Innovation
3. Geographic market definition and
4. Quantitative practices

For this report, a team of topic experts prepared an analysis by focus area, based on all relevant economic and legal literature that focuses on the key questions listed in the terms of reference including points of convergence, points of divergence and gaps with the guidance provided in the MDN. Furthermore, the team analysed and reviewed a range of competition enforcement guidelines, cases and court judgments by NCAs inside and outside the EEA.

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Online advertising: the impact of targeted advertising on advertisers, market access and consumer choice

The online advertising sector is growing at a significant rate in the past years, a trend that has been accelerated during the COVID-19 pandemic. Consumers and also SMEs as “end-users” become more exposed to online advertising. These advertisements are delivered by intermediary services, so called “Advertising Networks”, and are targeted to the individual user on the basis of their behaviour and personal data. This raises important questions about privacy, the potential of for exploitive discrimination and market power.

The WIK study "Online advertising: the impact of targeted advertising on advertisers, market access and consumer choice" identifies opportunities and risks of targeted online advertising from the perspective of consumers and companies against the background of current legislation and develops possible approaches to address these from a regulatory perspective.

For this purpose, the online advertising market is analysed with regard to its different value creation stages and market participants. Technical characteristics of different targeting methods such as real-time bidding (RTB), the design of advertising auctions, the role of data, cookies and other tracking tools are explained and economic implications for consumers, advertisers, providers of advertising space and intermediaries are derived.

Based on a detailed literature review, an analysis of legal frameworks, as well as stakeholder interviews and country-specific case studies, the study develops clear recommendations. These include information obligations, design guidelines for obtaining advertising authorisation, transparency regulations with regard to algorithms, advertising auctions and the success of advertising campaigns. In addition, measures to prevent abusive behaviour by intermediaries (e.g. bundling) are suggested, which can be assigned a gatekeeper role in the sense of the DMA draft.

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