The 'Enhanced No Economic Sense Test': Experimenting With Predatory Innovation

7 N.Y.U. Journal of Intell. Prop. & Ent. Law 30 (2018)

48 Pages Posted: 13 Feb 2018 Last revised: 27 Oct 2018

See all articles by Thibault Schrepel

Thibault Schrepel

Utrecht University School of Law; University Paris 1 Panthéon-Sorbonne

Date Written: February 1, 2018

Abstract

This paper originates from a long-standing anachronism of antitrust law in regard to high-tech markets. Conventional wisdom assumes that antitrust law mechanisms are well suited to the study of practices in technology markets and that only adjustments are to be made here and there. This is untrue. Several practices fall outside the scope of antitrust law because mechanisms for assessing the legality of practices are not adequate. In fact, no one can accurately identify a typical legal approach for non-price strategies. A chaotic jurisprudence emerges from it, which we will show.

With this paper, our ambition is to contribute to the literature by advancing a new test, called the "enhanced no economic sense" test, to be applied to non-price strategies. Various tests have been designed over the years to address the legality of diverse practices under antitrust law. Some of them are based on price analysis, including the test of the equally efficient rival, the rising rivals' costs test, and the profit sacrifice test. Some others are based on comparison, such as the balancing test, the test of disproportionality, and the compatibility test. They all suffer from multiple flaws. None of them, in fact, address non-price strategies such as predatory innovation without creating numerous type-I or II errors. Conversely, the test proposed in this article results in the creation of a uniform rule of law, which will ultimately increase consumer welfare by encouraging companies to keep innovating.

Keywords: antitrust, non price strategies, predatory innovation, legality test, no economic sense

JEL Classification: K21

Suggested Citation

Schrepel, Thibault, The 'Enhanced No Economic Sense Test': Experimenting With Predatory Innovation (February 1, 2018). 7 N.Y.U. Journal of Intell. Prop. & Ent. Law 30 (2018) . Available at SSRN: https://ssrn.com/abstract=3115949

Thibault Schrepel (Contact Author)

Utrecht University School of Law ( email )

Janskerkhof 3
Utrecht, 3512 BK
Netherlands

University Paris 1 Panthéon-Sorbonne ( email )

France

Register to save articles to
your library

Register

Paper statistics

Downloads
407
rank
66,967
Abstract Views
2,854
PlumX Metrics