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Is Innovation King at the Antitrust Agencies? The Intellectual Property Guidelines Five Years Later

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  • Gilbert, Richard
  • Tom, Willard K.

Abstract

The Microsoft antitrust case focused public attention on the role of antitrust enforcement in preserving the forces of innovation in high-technology markets. Traditionally, regulators focused on whether companies artificially hiked prices or reduced output. Now, they're increasingly likely to look first at whether corporate behavior aids or impedes innovation. In this paper, we examine whether innovation has displaced short-term price effects as the focus of antitrust enforcement by the Department of Justice and the Federal Trade Commission and, to the extent that it has, whether enforcement actions are any different as a result. We also ask whether enforcement actions in the area of intellectual property and innovation have been consistent with the 1995 DOJ/FTC Antitrust Guidelines for the Licensing of Intellectual Property [IP Guidelines]. Finally, we consider whether recent enforcement actions identify key areas in which additional guidance from the Agencies would be desirable. We address these questions first in merger cases and then in non-merger cases.

Suggested Citation

  • Gilbert, Richard & Tom, Willard K., 2001. "Is Innovation King at the Antitrust Agencies? The Intellectual Property Guidelines Five Years Later," Department of Economics, Working Paper Series qt8zv6b8c5, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  • Handle: RePEc:cdl:econwp:qt8zv6b8c5
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    Cited by:

    1. Boone, J. & Goeree, J.K., 2010. "Optimal Market Design," Other publications TiSEM ef8ba09b-1e3f-4a7d-aa66-d, Tilburg University, School of Economics and Management.
    2. Christine Greenhalgh & Padraig Dixon, 2002. "The Economics of Intellectual Property: A Review to Identify Themes for Future Research," Economics Series Working Papers 135, University of Oxford, Department of Economics.
    3. Gilbert Richard J, 2006. "Competition and Innovation," Journal of Industrial Organization Education, De Gruyter, vol. 1(1), pages 1-23, December.
    4. Jan Boone & Jacob K. Goeree, 2010. "Optimal market design," IEW - Working Papers 479, Institute for Empirical Research in Economics - University of Zurich.
    5. Nancy T. Gallini, 2002. "The Economics of Patents: Lessons from Recent U.S. Patent Reform," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 131-154, Spring.
    6. Shapiro, Carl, 2003. "Antitrust Limits to Patent Settlements," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 391-411, Summer.
    7. Anton Miglo, 2011. "The Development of Property Rights for Intellectual Property," Journal of Economics and Behavioral Studies, AMH International, vol. 3(4), pages 224-234.
    8. Liu, Chih-Chen & Mukherjee, Arijit & Wang, Leonard F.S., 2016. "Product market cooperation, entry and consumer welfare," International Review of Economics & Finance, Elsevier, vol. 44(C), pages 277-280.
    9. Salgado Banda Héctor & Breccia Adriana, 2005. "Competing or Colluding in a Stochastic Environment," Working Papers 2005-04, Banco de México.
    10. Liang Li, 2019. "Data and market definition of Internet-based businesses," Competition and Regulation in Network Industries, , vol. 20(1), pages 54-85, March.
    11. Müller, Ulf & Meyer, Lena, 2007. "Wettbewerb und Regulierung in der globalen Internetökonomie: Eine rechtsvergleichende Studie zwischen europäischem und US-amerikanischem Recht," Working Papers 45, University of Münster, Competence Center Internet Economy and Hybrid Systems, European Research Center for Information Systems (ERCIS).
    12. Carl Shapiro & Howard Shelanski, 2021. "Judicial Response to the 2010 Horizontal Merger Guidelines," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 58(1), pages 51-79, February.
    13. Benjamin R. Kern & Ralf Dewenter & Wolfgang Kerber, 2016. "Empirical Analysis of the Assessment of Innovation Effects in U.S. Merger Cases," Journal of Industry, Competition and Trade, Springer, vol. 16(3), pages 373-402, September.
    14. Arijit Mukherjee & Prabal Roy chowdhury, 2013. "Innovation and social desirability of merger," Economics Bulletin, AccessEcon, vol. 33(1), pages 348-360.
    15. Arijit Mukherjee & Uday Bhanu Sinha, 2024. "Product Market Cooperation, Foreign Direct Investment and Consumer Welfare," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 64(2), pages 315-326, March.
    16. Shapiro, Carl, 2002. "The FTC's Challenge to Intel's Cross-Licensing Practices," Competition Policy Center, Working Paper Series qt9756j0km, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
    17. Adriana Breccia & Hector Salgado-Banda, 2005. "Competing or Colluding in a Stochastic Framework," Birkbeck Working Papers in Economics and Finance 0504, Birkbeck, Department of Economics, Mathematics & Statistics.
    18. Akira Goto, 2009. "Innovation And Competition Policy," The Japanese Economic Review, Japanese Economic Association, vol. 60(1), pages 55-62, March.
    19. Litan, Robert E. & Shapiro, Carl, 2001. "Antitrust Policy During the Clinton Administration," Competition Policy Center, Working Paper Series qt45r5r72p, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
    20. Carl Shapiro, 2011. "Competition and Innovation: Did Arrow Hit the Bull's Eye?," NBER Chapters, in: The Rate and Direction of Inventive Activity Revisited, pages 361-404, National Bureau of Economic Research, Inc.
    21. Darren Filson & Saman Olfati & Fatos Radoniqi, 2015. "Evaluating Mergers in the Presence of Dynamic Competition Using Impacts on Rivals," Journal of Law and Economics, University of Chicago Press, vol. 58(4).
    22. Filson, Darren & Gretz, Richard T., 2004. "Strategic innovation and technology adoption in an evolving industry," Journal of Monetary Economics, Elsevier, vol. 51(1), pages 89-121, January.
    23. Adriana Breccia & Hector Salgado-Banda, 2006. "Competing or Colluding in a Stochastic Environment," Computing in Economics and Finance 2006 423, Society for Computational Economics.

    More about this item

    Keywords

    innovation; intellectual property; mergers; antitrust policy; standards; monopolization;
    All these keywords.

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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