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