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The Logic and Limits of Ex Ante Competition in a Standard-Setting Environment

Competition Policy International, Vol. 3, No. 1, Spring 2007

29 Pages Posted: 18 May 2007  

Damien Geradin

Tilburg Law & Economics Center (TILEC); University College London - Faculty of Laws

Anne Layne-Farrar

Charles River Associates; Northwestern University

Abstract

Some scholars have questioned the process by which cooperative standards are typically set, worrying about the potential for anticompetitive market power to come hand in hand with pro-competitive interoperability. To combat the perceived problems of ex post opportunism, the suggested solutions have focused on promoting procedures to facilitate ex ante competition. Since standards are generally desirable and competition often exists beforehand, many have argued that we need only formalize the ex ante competitive status quo to avoid any ex post market power trouble. Options proposed in the literature include ex ante auctions to be held during the standard definition phase or binding ex ante licensing commitments made before any vote on technologies occurs. We evaluate the various policy changes suggested with a particular eye to their unintended consequences and costs. Certainly the ex ante proposals would hold some appeal, if ex ante competition generally did not exist in their absence, but we find that they are problematic in important ways. We argue that not only are they not needed, they would tend to create more harm than good if implemented.

Keywords: antitrust, intellectual property, standard-setting, standard-setting organizations, SSO, FRAND, competition law

Suggested Citation

Geradin, Damien and Layne-Farrar, Anne, The Logic and Limits of Ex Ante Competition in a Standard-Setting Environment. Competition Policy International, Vol. 3, No. 1, Spring 2007. Available at SSRN: https://ssrn.com/abstract=987321

Damien Geradin (Contact Author)

Tilburg Law & Economics Center (TILEC)

Tilburg, 5000 LE
Netherlands

University College London - Faculty of Laws ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Anne Layne-Farrar

Charles River Associates ( email )

1 South Wacker Drive
Suite 3400
Chicago, IL 60606
United States
312-377-9238 (Phone)

HOME PAGE: http://www.crai.com

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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