Originally from:
International Antitrust Law & Policy: Fordham Competition Law 2012 - Hardcover
International Antitrust Law & Policy: Fordham Competition Law 2012 - Electronic
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I. INTRODUCTION: ANTI-COMPETITIVE AND PROCOMPETITIVE
AGREEMENTS AND INNOVATION
Ladies and Gentlemen,
It is a pleasure to be at Fordham again and to take part in this
morning’s panel on the relationship between competition and innovation.
I am delighted that Ronan Harty, Michael Reynolds and Philippe
Rincazaux are joining me for this session. Before hearing their expert
views, I’d like to start by referring to four themes that we can then further
explore together.
I would like to talk about the relationship between agreements
between competitors and innovation; then more generally about how
competition policy can promote innovation; about the links between
competition law and intellectual property law; and I will finish by looking
in a little more detail at innovation in high-tech markets.
Competition drives innovation. First, it forces companies to cut their
costs, which requires innovation. Second, it prompts them to produce
better products and services than their competitors and this also calls for
innovation.
Let me start this discussion with a reference to cartels. Cartels
undermine innovation and this point is not made frequently enough. In
the comfort zone of their illegal agreements, cartelists have lower or no
incentives to invest in innovation.
Economic studies confirm this, showing that cartelised industries
behave irrationally in commercial terms when it comes to research,
development and innovation. In many instances, the consequence of
entering a cartel is actually a drop in productivity and innovation.1
Collusive behaviour can also lead to situations where insufficient
resources are dedicated to R&D and the lifetime of outdated products is
artificially extended.
Author info coming soon...