Innovation Under Section 2 of the Sherman Act

Antitrust Law Journal, Forthcoming

44 Pages Posted: 6 Apr 2021 Last revised: 24 Nov 2021

See all articles by Richard Gilbert

Richard Gilbert

University of California, Berkeley

A. Douglas Melamed

Stanford Law School

Date Written: November 1, 2021

Abstract

Antitrust cases, including recent complaints filed against dominant technology platforms, have alleged conduct that harms innovation. Section 2 of the Sherman Act is sufficiently broad to address conduct that harms innovation, but courts have little experience adjudicating such allegations. This article briefly reviews the economics literature regarding the effects of market power on innovation incentives. We identify circumstances in which structural conditions warrant a presumption that anticompetitive conduct by a dominant firm is likely to harm or promote innovation and describe various ways in which consideration of likely innovation effects might support finding an antitrust violation or provide a defense of otherwise anticompetitive conduct.

Keywords: Innovation, antitrust, Sherman Act, monopolization

JEL Classification: K21, L41

Suggested Citation

Gilbert, Richard and Melamed, Doug, Innovation Under Section 2 of the Sherman Act (November 1, 2021). Antitrust Law Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3818303 or http://dx.doi.org/10.2139/ssrn.3818303

Richard Gilbert (Contact Author)

University of California, Berkeley ( email )

Department of Economics
530 Evans Hall #3880
Berkeley, CA 94720
United States
510 642 1507 (Phone)

Doug Melamed

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

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