The Competitiveness Council (Erkki Liikanen from DG Enterprise and
Information Society, Philippe Busquin from DG Research and Mario Monti
from DG Competition meeting at Brussels on November 26, 2002)
emphasized the need to create a European Research Area, which is to be
understood as a true internal market for science and knowledge. It is
particularly important to ensure consistency between the national and the
EU Research and Development (R&D) policies in order to increase
investment in research and enhance the innovation and technology transfer
capacity. In boosting the potential of the European Research Area certain
framework conditions need to be transposed into practice among which ‘a
competitive environment with research and innovation-friendly regulations
and competition rules’ is the most relevant to the present thesis.
Although technology consortia are rarely subject to antitrust scrutiny,
guidance is needed for a number of reasons. The very peculiar nature of
technology consortia can make it hard, if not impossible, to characterize a
consortium into specific categories such as horizontal, vertical or
conglomerate, which in turn makes it difficult to clearly delineate any
antitrust concerns. Furthermore, the European competition law regime is in
a crucial transformation process. With effect of 1 May 2004, the date of
entering into force of Regulation 1/2003 the whole of Article 81 will be
directly applicable in the member states. Thus any anti-competitive
agreement is no longer to be notified to the Commission for a compatibility
assessment under Article 81(3). Instead companies will have to assess the
compatibility of their agreement with Article 81 on their own.
In seeking guidance, the Commission likes to refer to its forty year
long decisional practice during which it has had the monopoly to handle
notified cases in respect of Article 81(3). Not surprisingly, uncertainties still
remain. This is not to say that the decisions are not helpful, but rather that
law is subject to interpretational developments. It is particularly
competition law that is rightfully influenced by economics and must be
determined in the individual setting. The law can not therefore provide
answers to all issues that have arisen due to commercial developments and
changing technology, which is why guidance on specific industry aspects
actually adds value. [...]
Table of Contents
1 INTRODUCTION
2 THE ECONOMIC REASONING OF TECH CONSORTIA
2.1 The Incentives Mechanism
2.2 Contrasting Stability Issues
2.2.1 Formalization of the Arrangement
2.2.2 Penalizing any Innovation Shortfall
2.2.3 Ejecting the Cheating Member
2.2.4 Sustaining the Consortium despite Default
2.3 Benefits and Risks
2.3.1 Risk Diminishing Factors
2.3.2 Risk Increasing Factors
2.4 Issues Relevant for Assessment
3 POLICY IMPLICATIONS FOR COMPETITION LAW
3.1 General Standard Setting Cooperation
3.2 Specialised Cooperation - Technology Consortia
3.3 Competition Impact Assessment
3.3.1 Market Power
3.3.2 Cooperative Momentum
3.3.3 IPR Reliance
3.3.4 Ancillary Restraints
3.4 From Policy to Competition Law
4 THE COMPETITION LAW PERSPECTIVE
4.1 Article 81: General Scope
4.1.1 The Ins and Outs under Article 81
4.1.1.1 Induced Collusion
4.1.1.2 Limitation of Technical Development
4.1.2 The De Minimis Exception
4.1.3 Relevance of Block Exemptions
4.1.3.1 Research & Development Agreements Regulation
4.1.3.2 Specialisation/Production Agreements Regulation
4.1.3.3 Technology Transfer Agreements Regulation
4.1.3.4 Appropriateness of Block Exemptions
4.2 Self-Assessment under Article 81(3)
4.2.1 Economic and Other Benefits
4.2.2 Consumer Benefits
4.2.3 Indispensability
4.2.4 No Elimination of Competition
4.2.5 Article 81(3) in Retrospect
4.3 Issues Requiring Clarification under Article 81
4.4 Article 82: General Scope
4.4.1 The Ins and Outs under Article 82
4.4.1.1 Abuse: Submarine IPR
4.4.1.2 Access Conditions: IPR as Essential Facility?
4.5 Appropriateness of the Essential Facilities Doctrine:
4.6 Beyond IMS Health - Future Application
4.7 Reconciling Competition Law with Intellectual Property Law: Formulating a Technology Consortium’s IPR Policy
5 CONCLUSION: MAIN FINDINGS
Objectives and Research Themes
The primary objective of this thesis is to provide an antitrust analysis framework for technology consortia, addressing the challenges posed by inter-firm collaboration, the pooling of intellectual property rights (IPR), and their complex impact on market competition. The central research question examines how antitrust authorities can effectively evaluate these consortia, particularly at the intersection of competition law and innovation, ensuring that legitimate pro-competitive collaborations are not hindered while preventing anti-competitive conduct.
- Economic reasoning and incentives driving firm participation in technology consortia.
- The distinction between open standard-setting cooperation and specialized technology consortia.
- Antitrust assessment of IPR pooling, including the risks of induced collusion and submarine IPR.
- The application of EC competition law (Articles 81 and 82) to innovation-driven inter-firm collaborations.
- Development of guidelines for formulating a technology consortium's IPR policy to ensure legal certainty.
Excerpt from the Book
2.1. The Incentives Mechanism
The incentives discussed are based on the Technology-Consortium Model as advanced recently by Baumol. One of the major premises is to assume the complementary nature of innovations that serve the incremental improvement of products to make these cheaper. Although the model assumes rather unrealistically that each firms spends the same amount on R&D and earns the same return on its expenditure for the sake of simplicity, this does not invalidate the main incentives shown in the model. This is because the assumptions are only there to allow better exemplification of the benefits, which cannot be negated just by virtue of their simplification.
The first incentive can be determined as being one of cost-reduction and speed. Although the cost of imitating respective participants’ technology in consortia is not negligible in comparison to the innovator’s cost, the transferee gains significant net benefits. This is easily explained by empirical studies that show that a friendly transfer is far less costly than reverse engineering or industrial espionage. In addition, in rapidly evolving high-tech industries speed is of paramount importance, which makes a speedy transfer of technical information mandatory to prevent it from becoming obsolete.
Summary of Chapters
1 INTRODUCTION: This chapter outlines the thesis objective of providing a guidance framework for the antitrust analysis of technology consortia, emphasizing the need to understand innovation economics to assess collaboration.
2 THE ECONOMIC REASONING OF TECH CONSORTIA: This chapter discusses why firms cooperate, exploring the incentives mechanism, stability issues compared to cartels, and the benefits and risks associated with standard-setting and joint R&D.
3 POLICY IMPLICATIONS FOR COMPETITION LAW: This chapter categorizes technology consortia into standard-setting and specialized cooperation, establishing key factors for competition impact assessment such as market power and cooperative momentum.
4 THE COMPETITION LAW PERSPECTIVE: This chapter examines the legal application of Article 81 and Article 82, discussing block exemptions, the risks of induced collusion and submarine IPR, and the necessary balance between competition and IPR protection.
5 CONCLUSION: MAIN FINDINGS: This final chapter synthesizes the findings, reiterating the importance of forward-looking antitrust analysis that balances past innovation performance with future competitive potential.
Keywords
Technology consortia, antitrust analysis, EC competition law, Article 81, Article 82, intellectual property rights, IPR, innovation markets, R&D, standard-setting, induced collusion, submarine IPR, essential facilities, market power, interoperability.
Frequently Asked Questions
What is the core focus of this thesis?
The thesis aims to provide an antitrust analysis framework for technology consortia, focusing on the specific challenges of inter-firm collaboration and intellectual property rights within the European competition law context.
What are the primary themes discussed in the work?
The work explores economic incentives for cooperation, the categorization of technology consortia, the analysis of competitive impacts, and the specific application of EC competition law, particularly regarding IPR policies.
What is the ultimate goal of the research?
The primary goal is to guide competition authorities, business firms, and legal advisers in evaluating the competitive effects of technology consortia and to provide recommendations for formulating IPR policies that minimize antitrust risks.
Which scientific methods are employed?
The thesis employs a comparative analysis of economic theories (such as the Baumol and Cournot models) combined with a detailed legal examination of EC decisional practice, ECJ case law, and relevant block exemption regulations.
What topics are covered in the main body of the work?
The main body covers the economic reasoning behind technology consortia, policy implications for competition law, the competition law perspective under Article 81 and 82, and the practical reconciliation of competition and IPR law.
Which keywords best characterize this research?
Key terms include technology consortia, antitrust, EC competition law, Article 81, Article 82, IPR, innovation markets, R&D, standard-setting, and effective competition.
How does the author propose to handle "submarine IPR"?
The author suggests that consortia should adopt clear, explicit IPR policies that require members to disclose all relevant IPR, preferably backed by contractual remedies and the licensing of technology on RAND terms to prevent anti-competitive abuse.
What role does the essential facilities doctrine play in this analysis?
The author analyzes the doctrine's application to IPR, arguing that it should only be used as a last resort in exceptional circumstances, specifically balancing the need for market access against the incentives for continued innovation.
- Arbeit zitieren
- Andreas Seip (Autor:in), 2003, Antitrust Implications of Technology Consortia, München, GRIN Verlag, https://www.grin.com/document/18915
