Joint Research and Development under US Antitrust and EU Competition Law

Joint Research and Development under US Antitrust and EU Competition Law

New Horizons in Competition Law and Economics series

Björn Lundqvist

This fascinating new book dissects, from a Competition law perspective, how Research and Development collaborations operate under both US and EU antitrust law. Analyzing the evolution of this innovation landscape from the 1970s to the present day, Blomqvist details the modifications and amendments made over this time to the relevant legal acts and guidelines. In doing to, the author picks up on the slow shift that has taken place in both the antitrust laws of the USA and the Competition Rules of the EU. The book concludes by discussing the necessity for a stringent attitude towards the antitrust establishment, and how this can be developed by reviving the concept of the ‘innovation market’.

Chapter 3: Research and development agreements under US antitrust law and EU competition rules

Björn Lundqvist

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


Simply stated, research ventures which minimise transaction costs, prevent overlapping research and create economies of scale even between competitors with market power are accepted and promoted under contemporary application of US antitrust law and EU competition law; these are seen as preventing inefficiencies or wasted investments. Joint research ventures might, of course, be beneficial for other reasons: joint research might create great synergies and the basis for researchers to exchange ideas. The meeting of minds has always been a way to enhance innovation and having competing researchers interact might be beneficial. Joint efforts might furthermore encourage the participants to take larger economic risks than single firms could. The above holds true for the contemporary antitrust policy vis-à-vis R & D collaborations. However, joint R & D efforts have historically been judged against a more stringent antitrust benchmark. Obviously, joint R & D make the parties co-owners of a common result, that is, creating a common profit centre, which they need to price together, whereas independent research would create different results, that is, different potential profit centres with different prices. Cooperation into research implies that neither of the parties is capable of securing a technology advantage over the other and thereby improves its position in the market in comparison with its R & D colleague. If the parties are small or medium-sized firms, this would, of course, not create any problems.

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