Property, Liability and Market Power: The Antitrust Side of Copyright
University of Siena - Department of Economics
Giovanni Battista Ramello
University of Piemonte Orientale - A. Avogadro - Department of Public Policy and Public Choice; International Centre for Economic Research (ICER)
Review of Law and Economics, Vol. 3, pp. 767-791
This paper investigates the interplay between copyright law and antitrust law in two distinct respects. We first argue that the origin of copyright seems to be rooted not only in the need to foster the production and the spread of knowledge but also in the necessity of limiting market power on the side of distributors. We then show the potential impact on market competition of the evolution of copyright as a property rule. While property rules reduce transaction costs in the standard case of bilateral monopoly over the exchange of information goods, they might increase transaction costs. When coupled with market power, a property rule enables the right holder to control uses and prices so as to implement entry deterrence strategies against potential competitors. Conversely, we argue that reversing property rules in favor of competitors or switching to liability rules for copyright may restore competitive outcomes. This conclusion brings new insights on the application of the essential facility doctrine to copyrighted works.
Number of Pages in PDF File: 34
Keywords: copyright, antitrust, property, liability, information goods, antitrust, monopolization, efficiency, tying, essential facility
JEL Classification: K11, K21, L41
Date posted: April 9, 2007 ; Last revised: January 9, 2008
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