customers are, whether there is competition, and whether the absence or potential absence of competition is a result of business acumen or anticompetitive conduct.
Fourth and finally, I believe that when the agencies bring cases in the high-tech sector, their story must be flexible not only to account for changes in the market place (be it competition for the x86 platform in the Intel litigation or Apple’s entry into mobile advertising in the Google/AdMob merger), but that it should also account for dynamic effects and efficiencies. As I have said elsewhere, in my view, antitrust law has for far too long largely applied a static analysis, which looks mostly at marginal prices and costs in the short run.[1] In contrast, dynamic analysis focuses on the long-run considerations that capture the goals associated with innovation, including, among other things, the creation of new products and services. As economist Joseph Schumpeter long ago recognized—and with particular application to the high-tech sector, I might add—a certain amount of protection from competition is necessary for a firm to undergo the risks and costs of innovating and that innovation can ultimately have a great effect on consumer welfare.[2] The question is how much? I don’t know the answer to that, but I do think we are shooting ourselves and consumers in the foot if we don’t take very seriously the dynamic nature of these markets – even if it is very hard to quantify – when we tell our story in cases in the high-tech sector.
- ↑ Commissioner J. Thomas Rosch, Promoting Innovation: Just How “Dynamic” Should Antitrust Law Be?, Remarks before the USC Gould School of Law 2010 Intellectual Property Institute (March 23, 2010), available at http://www.ftc.gov/speeches/rosch/100323uscremarks.pdf; Commissioner J. Thomas Rosch, The Role of Static and Dynamic Analysis in Pharmaceutical Antitrust, Remarks before the Fifth Annual In-House Counsel Forum on Pharmaceutical Antitrust (Feb. 18, 2010), available at http://www.ftc.gov/speeches/rosch/100218pharmaantitrust.pdf.
- ↑ Joseph A. Schumpeter, Capitalism, Socialism and Democracy (1942)
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