DOJ Giving Cover to Monopolizing Firms that Breach Antitrust Rules
The Hill (Oct. 11, 2018)
3 Pages Posted: 16 Jan 2019
Date Written: October 11, 2018
Imagine that a company makes a promise an industry relies on, gains monopoly power as a result, and then says “just kidding.” The head of the Antitrust Division, Makan Delrahim, has given this conduct an antitrust pass. That’s not right.
The setting for this scenario involves standards, which are ubiquitous in our high-tech, connected world. Standards that involve patents threaten concern: after companies are locked in to a standard, the patent holder could “hold up” the industry by demanding unreasonable royalties or blocking products from the market. For that reason, standards organizations have required patent holders to license on fair, reasonable, and nondiscriminatory (FRAND) terms.
In a series of speeches, Delrahim has been skeptical of patent holdup, and in an address in September 2018, he stated that FRAND abuse would not violate antitrust law. This piece explains how Delrahim reached this remarkable position through mischaracterizations of antitrust policy, the conduct at issue, and antitrust law.
Keywords: standards, patents, antitrust, holdup, FRAND
JEL Classification: K21, L40, L41, L63, O31, O34
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