Standardization under EU Competition Rules and US Antitrust Laws

Standardization under EU Competition Rules and US Antitrust Laws

The Rise and Limits of Self-Regulation

New Horizons in Competition Law and Economics series

Björn Lundqvist

Standardization under EU Competition Rules and US Antitrust Laws is a comprehensive and detailed legal analysis of standard-setting procedure and the regulation of standard essential patents. It deals with the competition law aspects of competitors' collaboration to create technical standards, as well as the contentious antitrust issues regarding access to standards and standard essential patents.

Chapter 2: The proliferation of IPRs and the rise of standards

Björn Lundqvist

Subjects: economics and finance, competition policy, law - academic, competition and antitrust law


It has been claimed that the information economy is populated with temporary monopolies. Hardware and software firms hold monopolies today knowing that a new technology will emerge that will topple their technology and, thus, overtake their monopoly position. In comparison, the industrial economy was, and still is, populated by stable oligopolies. The central difference between these two economies is that they have fundamentally different approaches to being successful: the driver in industrial economics is economy of scale, while the driver for the information economy is network effect. Network effects are now an old idea. We all know what it is, and can point to certain networks. The term was invented at the time of Microsoft and Intel's great success and was a way to describe Wintel's success on the PC market compared to the suffering of Apple. As Wintel's share on the PC market grew, users found Wintel more and more attractive and eventually the market 'tipped' to the advantage of Wintel. Network effects or network externalities imply that demand drives the economy. The value of a network or a technology (a standard) depends on the demand for the same. Other things being equal, it is better as a consumer or customer to be connected to a bigger network than a smaller network. Some economists argue that monopoly power in these cases is desirable.

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