Competition Law, Innovation and Antitrust

Competition Law, Innovation and Antitrust

An Analysis of Tying and Technological Integration

New Horizons in Competition Law and Economics series

Hedvig Schmidt

This innovative book assesses the hotly debated topic of tying from three different perspectives: competition law, economics and intellectual property rights. It highlights the faults and benefits of the current approaches to tying under EC competition law and US antitrust law.

Chapter 7: Conclusion

Hedvig Schmidt

Subjects: law - academic, competition and antitrust law, intellectual property law

Extract

1. CONCLUDING REMARKS This book has assessed how EC competition law and US antitrust law have approached tying. It identified their shortcomings and inflexibilities, but also highlighted its strengths. Based on the findings of recent economic thinking (in Chapter 2), the EC experience (Chapter 3) and the US experience under both antitrust law (Chapter 4) and IP law (Chapter 5) a new regulatory model was developed (Chapter 6), which particularly considered the recent reform debate of Article 82 and Section 2 and high-technology industries’ tendency for innovation through tying and technological integration. Chapter 2 showed that economic theory dictates that such a simplistic rule such as per se illegality, which has been the official approach in US antitrust and the practical consequence under EC competition law, is insufficient to deal with complex tying arrangements such as technological integration, and if innovation is to be promoted and not stifled a more flexible and realistic approach must be sought. To this effect, economists have demonstrated that tying appears to be harmful only when the company undertaking the tying possesses significant market power and the competition in the tied product market is imperfect. Some economists suggested therefore the possibility of introducing certain safe harbours, and importantly argued for a balancing test of the pro- and anti-competitive effects of the tying arrangements. However, such economic requests must be weighed against the legal concerns: the need for legal certainty, time restraints, clear and workable rules, which courts, competition authorities and private parties are reasonably comfortable...

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