Competitive Price Discrimination as an Antitrust Justification for Intellectual Property Refusals to Deal

44 Pages Posted: 15 Nov 2003 Last revised: 22 Oct 2015

See all articles by Benjamin Klein

Benjamin Klein

University of California, Los Angeles (UCLA) - Department of Economics; Compass Lexecon

John Shepard Wiley Jr.

Independent

Date Written: 2003

Abstract

Kodak and Xerox are two recent, celebrated, and conflicting antitrust decisions. Both cases involve defendant firms that owned intellectual property and that refused to deal with independent service organizations. The most likely explanation for these refusals to deal was that both defendants were enforcing systems of price discrimination. Antitrust law should count price discrimination as a legitimate business justification. The practice of price discrimination is common in highly competitive markets. It often has desirable economic effects. Unfortunately, some antitrust scholarship and case law view the practice of price discrimination as proof of market power. This view is mistaken. It stems from an incorrect definition of market power - one not accepted in antitrust law. Antitrust policymakers, including federal judges, should renounce price discrimination as evidence of market power and, instead, should accept price discrimination as a legitimate business justification. To do so is to facilitate sensible antitrust analysis.

Suggested Citation

Klein, Benjamin and Wiley, John Shepard, Competitive Price Discrimination as an Antitrust Justification for Intellectual Property Refusals to Deal (2003). Antitrust Law Journal, Vol. 70, p. 599, 2003. Available at SSRN: https://ssrn.com/abstract=466860

Benjamin Klein

University of California, Los Angeles (UCLA) - Department of Economics ( email )

1999 Avenue of the Stars
Suite 1150
Los Angeles, CA 90067-4628
United States
310-728-2025 (Phone)
310-728-2070 (Fax)

HOME PAGE: http://www.econ.ucla.edu/people/Faculty/Klein.html

Compass Lexecon ( email )

1999 Avenue of the Stars
Suite 1150
Los Angeles, CA 90067-4628
United States
310-728-2025 (Phone)
310-728-2070 (Fax)

HOME PAGE: http://www.compasslexecon.com/professionals/bio?id=152

John Shepard Wiley (Contact Author)

Independent ( email )

No Address Available

Register to save articles to
your library

Register

Paper statistics

Downloads
55
rank
359,421
Abstract Views
235
PlumX Metrics