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Competition Policy and Innovation

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  • David Encaoua
  • Abraham Hollander

Abstract

The question addressed by the paper is whether standard procedures and widely accepted insights of competition policy remain valid when one deals with potentially anti-competitive conduct in innovative industries. The question of appropriateness arises because competition in these industries displays features that are radically different from those encountered in traditional sectors of the economy. Competition is for the market rather than in the market, dynamic aspects of competition matter more than allocative aspects, intellectual property rights (IPR) reinforce network effects present in knowledge-based industries. The paper examines why these differences matter with respect to market delineation, assessment of intensity of competition, and predatory conduct. It also raises the question as to what extent competition law limits the innovators' rights not to license their inventions to others, especially when they correspond to essential facilities . It explores the problem created by excessive protection as well as the hold-up problem that arises in a context of sequential innovations. It examines the antitrust position in regard to the treatment of collaborative arrangements among holders of IPRs, such as cross-licences , patent-pools , and joint-standard settings. Finally, it presents a discussion on a possible role of competition law in shaping intellectual property laws in order to benefit from the complementarity between intellectual protection and antitrust rules. Copyright 2002, Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

Volume (Year): 18 (2002)
Issue (Month): 1 (Spring)
Pages: 63-79

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Handle: RePEc:oup:oxford:v:18:y:2002:i:1:p:63-79

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Web page: http://oxrep.oupjournals.org/

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Cited by:
  1. Dolfsma, Wilfred, 2005. "Towards a dynamic (Schumpeterian) welfare economics," Research Policy, Elsevier, vol. 34(1), pages 69-82, February.
  2. Crampes, Claude & Encaoua, David & Hollander, Abraham, 2004. "Competition and Intellectual Property in the European Union," IDEI Working Papers 332, Institut d'Économie Industrielle (IDEI), Toulouse, revised Feb 2005.
  3. Padraig Dixon & Christine Greenhalgh, 2003. "The Economics of Intellectual Property: A Review to Identify Themes for Future Research," Levine's Working Paper Archive 618897000000000645, David K. Levine.
  4. Wolfgang Kerber & Simonetta Vezzoso, 2004. "EU Competition Policy, Vertical Restraints, and Innovation: An Analysis from an Evolutionary Perspective," Marburg Working Papers on Economics 200414, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  5. Georg von Graevenitz, 2005. "Integrating Competition Policy and Innovation Policy: The Case of R&D Cooperation," Industrial Organization 0503006, EconWPA.
  6. David Encaoua & Yassine Lefouili, 2005. "Choosing intellectual protection : imitation, patent strength and licensing," Cahiers de la Maison des Sciences Economiques v06039, Université Panthéon-Sorbonne (Paris 1), revised Mar 2006.
  7. repec:hal:cesptp:halshs-00415747 is not listed on IDEAS
  8. Emmanuel Duguet & Stéphanie Monjon, 2004. "Is innovation persistent at the firm Level . An econometric examination comparing the propensity score and regression methods," Cahiers de la Maison des Sciences Economiques v04075, Université Panthéon-Sorbonne (Paris 1).
  9. Khazabi, Massoud, 2004. "Innovation and cooperation with horizontal spillovers," MPRA Paper 39497, University Library of Munich, Germany.
  10. repec:hal:journl:halshs-00415747 is not listed on IDEAS
  11. repec:hal:cesptp:halshs-00177614 is not listed on IDEAS
  12. Ren� Belderbos & Leo Sleuwaegen & Reinhilde Veugelers, 2010. "Market Integration and Technological Leadership in Europe," European Economy - Economic Papers 403, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  13. Clarke, George R. G., 2005. "Do government policies that promote competition encourage or discourage new product and process development in low and middle-income countries?," Policy Research Working Paper Series 3471, The World Bank.
  14. Encaoua, David & Guellec, Dominique & Martinez, Catalina, 2006. "Patent systems for encouraging innovation: Lessons from economic analysis," Research Policy, Elsevier, vol. 35(9), pages 1423-1440, November.
  15. Shastitko, A. & Kurdin, A., 2014. "Protection of Intellectual Property Rights and Competition Policy: Seeking for a Better Balance," Journal of the New Economic Association, New Economic Association, vol. 21(1), pages 111-135.
  16. Goyal, Ashima, 2005. "New technology and labour Markets: Entrants, outsourcing and matching," MPRA Paper 24620, University Library of Munich, Germany.

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