Innovation Markets and Competition Analysis

Innovation Markets and Competition Analysis

EU Competition Law and US Antitrust Law

New Horizons in Competition Law and Economics series

Marcus Glader

This book examines the legal standards – and their underlying economic rationale – for the protection of competition in the innovation process, in both European competition law and American antitrust law.

Chapter 5: The framework for innovation analysis

Marcus Glader

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

Extract

This chapter aims to provide a deeper understanding of the analysis of competition in innovation. Key questions relate to the framework for the analysis that was developed after the introduction of the innovation market concept and the relationship with other kinds of market definitions and analysis doctrines. The assessment of innovation competition in the defined markets, the role of efficiencies in the appraisal of a transaction and possible remedies to alleviate anti-competitive effects will be handled in the next chapter. In this chapter it will be shown that the analysis of competition in the innovation process may be conducted for the purpose of detecting a variety of competitive effects. Although competition is a broad notion that affects various parameters such as the pace of innovation, variety, quality and price of products, it is for the antitrust authorities to establish the effects of a particular market practice. To identify the innovating firms and products under development, and to assess the terms of innovation in the area, may be the key to drawing any prospective conclusions – whether the primary effect relates to product innovation, variety or price. Second, it will be shown that innovation analysis is applied at different market levels. When analysing actual and potential competition in existing markets, it is generally acknowledged that innovation may be an important dimension. Innovation aspects may be integrated when analysing the competitive conditions prevalent in the product market. But the R&D dimension of the market may also be analysed through the framework of...

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