Which brings us back to the EU's objections to the proposed tie-up of AOL and Time Warner. Network effects are largely nonexistent for the music and entertainment programming that AOL might sell. Consumers of entertainment content on AOL will not care how many others buy their products there. As for e-mail, there seems to be no network effect at all. Also, many sites in Europe and beyond offer free e-mail addresses.
European regulators seem to misunderstand network effects.
Perhaps they confuse AOL with Napster, which has strong network effect because the number of songs available depends on the number of users. AOL will have the same library of music regardless of how many users go shopping there. Supposedly VHS prevailed over technically superior Beta because it was locked in by network effects. VHS became dominant because it initially offered two hours per tape when Beta offered only one. Consumers mostly wanted to record movies and sports, which lasted longer than one hour.