Antitrust, Innovation, and Competitiveness

By Thomas M. Jorde; David J. Teece | Go to book overview

institutions, including academic commentators, continue to refine our guesses about the way the world works and to formulate tentative presumptions to guide actual antitrust decisions. If we can be realistic in identifying competition, especially foreign competition, where it exists, and in recognizing that productivity, efficiency, and innovation are not inexorable but have to be worked at, then the Sherman Act may well be around for another century.

Of course, only the most romantic trustbuster would suppose that existing antitrust institutions always suffice. Maybe some other power will work better or existing antitrust tribunals will fail to see or weigh an important public service that could result from an otherwise illegal arrangement. Congress, with all the other demands on its attention, can not be relied on to respond to the needs of a particular market. We may therefore need to create some kind of power to exempt an arrangement from antitrust liability. I say that with some hesitation, for agencies with such power have generally seemed, in my view, too generous in exercising it, and even an antitrust agency can be overruled by its masters. Still, I believe we need to give more thought to improving the business review procedures of the Department of Justice and the Federal Trade Commission and perhaps empowering them to grant a full exemption in selected circumstances.

Even so, our presumption should continue to favor competition rather than its limitation. After all, that is the strength of the Sherman Act and it has served us well.

See, generally, S. Breyer, Regulation and its Reform ( 1982).
Compare, e.g., H. Demsetz, "Why Regulate Utilities?" J.L. & Econ. 11 ( 1968): 55, with O. Williamson, "Franchise Bidding for Natural Monopolies--In General and with Respect to CATV", Bell J. Econ. 7 ( 1976):73.
E.g., respectively, Sunkist Growers v. Winckler & Smith Citrus Prods. Co., 370 U.S. 19 ( 1962); Parker v. Brown, 317 U.S. 341 ( 1943); United States v. Borden Co., 308 U.S. 188 ( 1939).
See, e.g., F. Machlup, An Economic Review of the Patent System, Study No. 15 of the Subcomm. on Patents, Trademarks, & Copyrights of the Sen. Judiciary Comm., 85 Cong., 2d sess., Committee Print ( 1958); A. Kahn, "The Role of Patents," in J. P. Miller , ed., Competition, Cartels and Their Regulation ( 1962); R. Nelson, "The Simple Economics of Basic Scientific Research," J. Pol. Econ. 67 ( 1959):297.
J. Schumpeter, Capitalism, Socialism, and Democracy, ( 1942), chs. 7-8.
A sampling of the literature will be found in F. M. Scherer and D. Ross, Industrial Market Structure and Economic Performance ( 3d ed. 1990), ch. 17. See also P. Areeda & D. Turner, 2 Antitrust Law ¶407 ( 1978).
United States v. AT&T, 552 F. Supp. 131 (D.D.C. 1982), aff'd mem. sub nom. Maryland v. United States, 460 U.S. 1001 ( 1983).
Business Electronics Corp. v. Sharp Electronics Corp., 108 S.Ct. 1515 ( 1988).
Hoover v. Ronwin, 466 U.S. 588 ( 1984).
Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 ( 1985).
E.g., Brown Shoe Co. v. United States, 370 U.S. 294 ( 1962).
See P. Areeda & D. Turner, 3 Antitrust Law ¶523b6 and ¶523.1-2 ( 1978 & Supp. 1991).


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Antitrust, Innovation, and Competitiveness
Table of contents

Table of contents

  • Title Page iii
  • Preface vii
  • Notes viii
  • Contents ix
  • Contributors xi
  • 1 - Introduction 3
  • Notes 25
  • References 27
  • 2 - Antitrust Law as Industrial Policy: Should Judges and Juries Make It? 29
  • Notes 45
  • 3 - Innovation, Cooperation, and Antitrust 47
  • Notes 63
  • References 68
  • Appendix: National Cooperative Research and Commercialization Act (ncrca) 71
  • 4 - Antitrust: Source of Dynamic and Static Inefficiencies? 82
  • Notes 95
  • References 96
  • 5 - Agreements Between Competitors 98
  • Notes 114
  • 6 - Ignorance and Antithrust 119
  • Notes 132
  • 7 - Antitrust Lenses and the Uses of Transaction Cost Economics Reasoning 137
  • Notes 158
  • References 161
  • 8 - Monopoly Conduct, Especially Leveraging Power from One Product or Market to Another 165
  • 9 - Market Structure and Technical Advance: The Role of Patent Scope Decisions 185
  • Notes 219
  • 10 - Conclusion 233
  • Index 235


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