The Roles of Innovation in Competition Law Analysis
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The Roles of Innovation in Competition Law Analysis

Edited by Paul Nihoul and Pieter Van Cleynenbreugel

Rapid technological innovations have challenged the conventional application of antitrust and competition law across the globe. Acknowledging these challenges, this original work analyses the roles of innovation in competition law analysis and reflects on how competition and antitrust law can be refined and tailored to innovation.
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Chapter 8: Joint research and development collaborations under competition law

Björn Lundqvist

Abstract

The object of this chapter is to dissect the antitrust treatment in the US and under EU law of joint research and development agreements (joint R & D), discussing issues such as innovation and competition in innovation, and whether these issues are taken into consideration when scrutinising R & D collaborations. The notions of ‘innovation markets’ and ‘innovation competition’ will be analysed. This chapter suggests that R & D collaborations would possibly benefit from a more intense antitrust scrutiny in reference to certain industries and conduct, while generally the lenient attitude should continue. It seems clear that neither legal nor economic research has been able to present and agree on a test that is able to distinguish the ‘bad’ R & D collaborations from the ‘good’. Before we have such a test, antitrust authorities should tread with care. The antitrust analysis should be based on conclusions from economic research in the creation and sustainment of innovation – innovation competition. Thus, the antitrust scrutiny would need to distinguish between incremental innovation efforts by often large and specialised firms already present in the market where the product or technology to be invented will be inserted. Then dominance, competitors and market power may be identified since it may be predicted with some certainty that the innovation will materialise and how the market will react to the innovation. On the other hand, efforts to create radical or disruptive innovations conducted by R & D-intensive firms in collaboration with other firms or universities are often difficult to predict and are generally pro-competitive. In reference to joint R & D to create radical or disruptive innovations, identifying exclusionary effects on future markets or on R & D is difficult.

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