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Innovation Markets, Future Markets, or Potential Competition: How Should Competition Authorities Account for Innovation Competition in Merger Reviews?

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  • Benjamin Kern

    (University of Marburg)

Abstract

The relevant competitors in regard to innovation might, but not necessarily do, correspond to the identified competitors on actual product markets. Hence, the conventional analysis of product markets, in order to assess the potential anticompetitive effects of mergers, is insufficient to capture innovation competition in its full extent. As a consequence, the aim of this article is to introduce and compare the existing alternative approaches which can, in principle, be used for the assessment of anticompetitive innovation effects in merger review. By focusing on the applied U.S. Antitrust, it turns out that none of the existing approaches seems to be appropriate to fully account for innovation competition. However, the ‘Innovation Market Analysis’, the first framework especially designed for the assessment of innovation aspects, might still serve as a good starting point for the development of a revised assessment framework.

Suggested Citation

  • Benjamin Kern, 2014. "Innovation Markets, Future Markets, or Potential Competition: How Should Competition Authorities Account for Innovation Competition in Merger Reviews?," MAGKS Papers on Economics 201408, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:201408
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    File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/08-2014_kern.pdf
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    Citations

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    Cited by:

    1. Benjamin Rene Kern & Juan Manuel Mantilla Contreras, 2014. "Mergers and the Incentives to Undertake Product Innovation Oriented R&D: First Steps Towards an Assessment Approach," MAGKS Papers on Economics 201417, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. 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.
    3. Gamal Atallah, 2016. "Endogenous Efficiency Gains from Mergers," Southern Economic Journal, John Wiley & Sons, vol. 83(1), pages 202-235, July.
    4. Wolfgang Kerber, 2017. "Rights on Data: Competition, Innovation, and Competition Law: Dissecting the Interplay," MAGKS Papers on Economics 201742, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

    More about this item

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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