But the sixth and biggest stumbling block to the agencies challenging innovation markets is that, in my mind, the long-standing threshold question debated by Schumpeter, Arrow, and others—i.e., whether it is better to keep the scientists separate and in competition or put them together at the same place—has not been resolved. If it is the case that having all of the world’s experts meet together leads to better innovation, then we should allow consolidation and coordination. Conversely, if we’re better off having scientists and software developers in competition, then we should be vigilant about enforcement. For what it’s worth and to complicate things further, I’m not even sure there is a “one size fits all” answer here. After all, it may be that the answers to that question are different depending on whether the challenge is made in the pharma context (where the scientists are seeking a clear objective—such as a cure for Alzheimer’s) or in the high-tech context (where the sky is the limit as far as innovation goes). In any event, this objection was more persuasive to me when the challenge was to mergers/conduct in the pharmaceutical industry under the 1992 Guidelines. Then, we were limited to looking at whether entry was likely over a two-year time horizon.[1] The need in the pharma context to get FDA approval before acting combined with the fact that predicting entry in high-tech markets made the hard-and-fast two-year cutoff very problematic. Given that the new guidelines have done away with that requirement and emphasize that the agencies will look carefully at whether a merger will diminish innovation, we have more flexibility to look at innovation markets because we can look at longer time
- ↑ 1992 Horizontal Merger Guidelines, § 3.2 (entry is considered timely and can reverse any likely anticompetitive effects only if entry will be “achieved within two years from initial planning to significant market impact”).
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