Table of Contents

Handbook on the Digital Creative Economy

Handbook on the Digital Creative Economy

Elgar original reference

Edited by Ruth Towse and Christian Handke

Digital technologies have transformed the way many creative works are generated, disseminated and used. They have made cultural products more accessible, challenged established business models and the copyright system, and blurred the boundary between producers and consumers. This unique resource presents an up-to-date overview of academic research on the impact of digitization in the creative sector of the economy.

Chapter 19: Copyright and competition policy

Ariel Katz

Subjects: economics and finance, cultural economics, intellectual property, innovation and technology, intellectual property, technology and ict, law - academic, intellectual property law


Despite the tension that exists between the goals of competition law and copyright law (and other forms of intellectual property) the modern view is that ultimately these two areas of law share the same long-term goals of promoting innovation to enhance consumer welfare (Bohannan and Hovenkamp, 2011). We tolerate some static inefficiency that may result from granting exclusive rights in order to promote dynamic efficiency and long-term growth. As Frank Easterbrook, echoing Schumpeter (Schumpeter, 1994), put it, ëan antitrust policy that reduced prices by 5 percent today at the expense of reducing by 1 percent the annual rate at which innovation lowers the cost of production would be a calamity. In the long run a continuous rate of change, compounded, swamps static lossesí (Easterbrook, 1992: 119). The problem, of course, is that in formulating the optimal policies (optimal in the sense of second best) it is not clear how much static inefficiency we should tolerate in order to promote dynamic efficiency, and moreover, since todayís intellectual goods are inputs for those of tomorrow, there is no magic line that allows us to know whether when we sacrifice the static we promote the dynamic or, instead, we impede both. How the law handles this tension in the application of competition law to intellectual property has been the subject of extensive literature (for example, LÈvÍque and Shelanski, 2005; Boyer et al., 2009; Anderman and Ezrachi, 2011).

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