Impact of Innovation on Competition Law: From an Outcome-Oriented Approach to a Process-Oriented Approach

22 Pages Posted: 2 Aug 2016 Last revised: 17 Aug 2016

See all articles by Liyang Hou

Liyang Hou

Shanghai Jiao Tong University (SJTU) - KoGuan Law School

Date Written: August 1, 2016

Abstract

Innovation was traditionally protected from its outcome under property law, in particular intellectual property law. However, this approach has gradually reached its limit when more innovation needs to be stimulated. One branch of competition law, namely antitrust law, has thus developed a process-oriented protection in order to open up the process to more innovation, though such a new approach slightly intrudes on the exclusivity of property rights. However, less has been discussed so far on how this new approach affects the other equally important branch of competition law, namely anti-unfair competition law. Anti-unfair competition law targets conduct that dishonestly takes advantage of other competitors, thus traditionally having its core analytical framework built upon the evaluation of individual loss. While anti-unfair competition law can still fulfill most of its purpose by resting on the outcome-oriented approach, the drawbacks have been extensively revealed with the recent challenge of ad-blocking applications. At first sight, the traditional approach may be justified to hold developers of these applications liable for the revenue loss of online media operators. However, a second thinking suggests that the traditional approach may stifle innovation. Therefore, this article advances a new economic interpretation on the business model of online media operation, the target of ad-blocking applications, namely the combined sale model vis-à-vis the traditional single product model. This article finally concludes that the process-oriented approach should prevail the traditional outcome oriented approach where the combined sale model is involved.

Keywords: Innovation, Antitrust Law, Anti-unfair Competition Law, Ad-blocking application, Outcome, Process

Suggested Citation

Hou, Liyang, Impact of Innovation on Competition Law: From an Outcome-Oriented Approach to a Process-Oriented Approach (August 1, 2016). Available at SSRN: https://ssrn.com/abstract=2817023 or http://dx.doi.org/10.2139/ssrn.2817023

Liyang Hou (Contact Author)

Shanghai Jiao Tong University (SJTU) - KoGuan Law School ( email )

Huashan Road 1954
Xuhui District
Shanghai, Shanghai 200030
China
+86-21-6293-4632 (Phone)

HOME PAGE: http://law.sjtu.edu.cn/TeacherDetail123.aspx

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