IDEAS home Printed from https://ideas.repec.org/p/mar/magkse/201742.html
   My bibliography  Save this paper

Rights on Data: Competition, Innovation, and Competition Law: Dissecting the Interplay

Author

Listed:
  • Wolfgang Kerber

    (University of Marburg)

Abstract

The digital revolution has reinvigorated the discussion about the problem how to consider innovation in the application of competition law. This raises difficult questions about the relationship between competition and innovation as well as what kind of assessment concepts competition authorities should use for investigating innovation effects, e.g., in merger cases. This paper, on one hand, reviews briefly our economic knowledge about competition and innovation, and claims that it is necessary to go beyond the limited insights that can be gained from industrial economics research about innovation (Schumpeter vs. Arrow discussion), and take into account much more insights from innovation research, evolutionary innovation economics, and business and management studies. On the other hand, it is also necessary to develop much more innovation-specific assessment concepts in competition law (beyond the traditional product market concept). Using the example of assessing innovation competition in merger cases, this article suggests to analyze much more systematically the resources (specialized assets) that are necessary for innovation. This concept is directly linked to the new discussion about the Dow/DuPont case in the EU and about data as necessary resource for (data-driven) innovation.

Suggested Citation

  • 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).
    • Handle: RePEc:mar:magkse:201742
    as

    Download full text from publisher

    File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/paper_2017/42-2017_kerber.pdf
    File Function: First 201742
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, vol. 78(5), pages 1133-1137, December.
    2. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899.
    3. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: an Inverted-U Relationship," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 701-728.
    4. Comanor, William S. & Scherer, F.M., 2013. "Mergers and innovation in the pharmaceutical industry," Journal of Health Economics, Elsevier, vol. 32(1), pages 106-113.
    5. Jan Boone, 2000. "Competitive Pressure: The Effects on Investments in Product and Process Innovation," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 549-569, Autumn.
    6. Gilbert Richard J, 2006. "Competition and Innovation," Journal of Industrial Organization Education, De Gruyter, vol. 1(1), pages 1-23, December.
    7. Cassiman, Bruno & Colombo, Massimo G. & Garrone, Paola & Veugelers, Reinhilde, 2005. "The impact of M&A on the R&D process: An empirical analysis of the role of technological- and market-relatedness," Research Policy, Elsevier, vol. 34(2), pages 195-220, March.
    8. 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).
    9. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
    10. 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.
    11. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    12. Josef Drexl, 2012. "Anticompetitive Stumbling Stones On The Way To A Cleaner World: Protecting Competition In Innovation Without A Market," Journal of Competition Law and Economics, Oxford University Press, vol. 8(3), pages 507-542.
    13. 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).
    14. Federico, Giulio & Langus, Gregor & Valletti, Tommaso, 2017. "A simple model of mergers and innovation," Economics Letters, Elsevier, vol. 157(C), pages 136-140.
    15. Raymond De Bondt & Jan Vandekerckhove, 2012. "Reflections on the Relation Between Competition and Innovation," Journal of Industry, Competition and Trade, Springer, vol. 12(1), pages 7-19, March.
    16. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    17. Wolfgang Kerber & Nicole J. Saam, 2001. "Competition As a Test of Hypotheses: Simulation of Knowledge-Generating Market Processes," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 4(3), pages 1-2.
    18. Cohen, Wesley M & Klepper, Steven, 1992. "The Tradeoff between Firm Size and Diversity in the Pursuit of Technological Progress," Small Business Economics, Springer, vol. 4(1), pages 1-14, March.
    19. repec:reg:rpubli:443 is not listed on IDEAS
    20. Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(3), pages 395-410.
    21. Motta, Massimo & Tarantino, Emanuele, 2021. "The effect of horizontal mergers, when firms compete in prices and investments," International Journal of Industrial Organization, Elsevier, vol. 78(C).
    22. Budzinski, Oliver & Christiansen, Arndt, 2007. "The Oracle/PeopleSoft case: unilateral effects, simulation models and econometrics in contemporary merger control," IBES Diskussionsbeiträge 157, University of Duisburg-Essen, Institute of Business and Economic Studie (IBES).
    23. Philippe Aghion & Christopher Harris & Peter Howitt & John Vickers, 2001. "Competition, Imitation and Growth with Step-by-Step Innovation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(3), pages 467-492.
    24. Richard R. Nelson, 1995. "Recent Evolutionary Theorizing about Economic Change," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 48-90, March.
    25. Wolfgang Kerber, 2011. "Competition, Innovation and Maintaining Diversity through Competition Law," Chapters, in: Josef Drexl & Wolfgang Kerber & Rupprecht Podszun (ed.), Competition Policy and the Economic Approach, chapter 9, Edward Elgar Publishing.
    26. Haucap, Justus & Stiebale, Joel, 2016. "How mergers affect innovation: Theory and evidence from the pharmaceutical industry," DICE Discussion Papers 218, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    27. David Evans & Keith Hylton, 2008. "The Lawful Acquisition and Exercise of Monopoly Power and Its Implications for the Objectives of Antitrust," CPI Journal, Competition Policy International, vol. 4.
    28. Boone, Jan, 2001. "Intensity of competition and the incentive to innovate," International Journal of Industrial Organization, Elsevier, vol. 19(5), pages 705-726, April.
    29. Richard Gilbert, 2006. "Looking for Mr. Schumpeter: Where Are We in the Competition-Innovation Debate?," NBER Chapters, in: Innovation Policy and the Economy, Volume 6, pages 159-215, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haucap, Justus & Rasch, Alexander & Stiebale, Joel, 2019. "How mergers affect innovation: Theory and evidence," International Journal of Industrial Organization, Elsevier, vol. 63(C), pages 283-325.
    2. 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).
    3. Federico, Giulio & Langus, Gregor & Valletti, Tommaso, 2018. "Horizontal mergers and product innovation," International Journal of Industrial Organization, Elsevier, vol. 59(C), pages 1-23.
    4. Federico, Giulio & Langus, Gregor & Valletti, Tommaso, 2018. "Reprint of: Horizontal mergers and product innovation," International Journal of Industrial Organization, Elsevier, vol. 61(C), pages 590-612.
    5. Shastitko. Andrey (Шаститко, Андрей) & Komkova, Anastasia Andreevna (Комкова, Анастасия Андреевна) & Kurdin, Alexander (Курдин, Александр) & Shastitko, Anastasia (Шаститко, Анастасия), 2016. "Competition Policy and Incentives for Innovation [Конкурентная Политика И Стимулы К Инновационной Деятельности]," Working Papers 1447, Russian Presidential Academy of National Economy and Public Administration.
    6. Michael Peneder & Martin Woerter, 2014. "Competition, R&D and innovation: testing the inverted-U in a simultaneous system," Journal of Evolutionary Economics, Springer, vol. 24(3), pages 653-687, July.
    7. Thompson, Mark James & Woerter, Martin, 2020. "Competition and invention quality: Evidence from Swiss firms," Technological Forecasting and Social Change, Elsevier, vol. 156(C).
    8. Marshall, Guillermo & Parra, Álvaro, 2019. "Innovation and competition: The role of the product market," International Journal of Industrial Organization, Elsevier, vol. 65(C), pages 221-247.
    9. 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.
    10. Brett Hollenbeck, 2020. "Horizontal mergers and innovation in concentrated industries," Quantitative Marketing and Economics (QME), Springer, vol. 18(1), pages 1-37, March.
    11. Bessonova, Evguenia & Gonchar, Ksenia, 2019. "How the innovation-competition link is shaped by technology distance in a high-barrier catch-up economy," Technovation, Elsevier, vol. 86, pages 15-32.
    12. MARSCHINSKI Robert & DE AMORES HERNANDEZ Antonio & AMOROSO Sara & BAUER Peter & CARDANI Roberta & CSEFALVAY Zoltan & GENTY Aurelien & GKOTSIS Petros & GREGORI Wildmer & GRASSANO Nicola & HERNANDEZ GUE, 2021. "EU competitiveness: recent trends, drivers, and links to economic policy: A Synthesis Report," JRC Research Reports JRC123232, Joint Research Centre.
    13. Antonio Tesoriere, 2021. "Drastic innovation reduces firms’ incentives to create divisions," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(3), pages 971-994, October.
    14. Walter Park & Ralph Sonenshine, 2012. "Impact of Horizontal Mergers on Research & Development and Patenting: Evidence from Merger Challenges in the U.S," Journal of Industry, Competition and Trade, Springer, vol. 12(1), pages 143-167, March.
    15. Benavente, Jose Miguel & Zuniga, Pluvia, 2021. "How does market competition affect firm innovation incentives in emerging countries? Evidence from Latin American firms," MERIT Working Papers 2021-024, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. Benno Buehler & Daniel Coublucq & Cyril Hariton & Gregor Langus & Tommaso Valletti, 2017. "Recent Developments at DG Competition: 2016/2017," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 51(4), pages 397-422, December.
    17. Vivek Ghosal & Jiayao Ni, 2015. "Competition and Innovation in Automobile Markets," CESifo Working Paper Series 5504, CESifo.
    18. Haucap, Justus & Stiebale, Joel, 2023. "Non-price effects of mergers and acquisitions," DICE Discussion Papers 402, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    19. Im, Hyun Joong & Park, Young Joon & Shon, Janghoon, 2015. "Product market competition and the value of innovation: Evidence from US patent data," Economics Letters, Elsevier, vol. 137(C), pages 78-82.
    20. Olga Slivko & Bernd Theilen, 2014. "Innovation or imitation? The effect of spillovers and competitive pressure on firms’ R&D strategy choice," Journal of Economics, Springer, vol. 112(3), pages 253-282, July.

    More about this item

    Keywords

    Competition; innovation; competition law; merger control; innovation market;
    All these keywords.

    JEL classification:

    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mar:magkse:201742. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bernd Hayo (email available below). General contact details of provider: https://edirc.repec.org/data/vamarde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.