Marcos, Francisco --- "Innovation by dominant firms in the market: damned if you don’t … but damned if you do?" [2018] ELECD 1640; in Nihoul, Paul; Van Cleynenbreugel, Pieter (eds), "The Roles of Innovation in Competition Law Analysis" (Edward Elgar Publishing, 2018) 33

Book Title: The Roles of Innovation in Competition Law Analysis

Editor(s): Nihoul, Paul; Van Cleynenbreugel, Pieter

Publisher: Edward Elgar Publishing

ISBN: 9781788972437

Section: Chapter 3

Section Title: Innovation by dominant firms in the market: damned if you don’t … but damned if you do?

Author(s): Marcos, Francisco

Number of pages: 17

Abstract/Description:

Innovation is key for dynamic efficiency and one of the best recipes to increase long-term businesses’ profits and, at the same time, enhance consumer welfare. Modern high-technology markets offer a perfect account of the importance of innovation for business success: either firms keep apace innovating, or rivals will overcome them and they will be left aside by consumers. History shows many examples of firms that have failed to sustain the innovation game and have faded away. At the same time it also demonstrates how many successful businesses have gained a powerful position in the market in a very short period of time by offering good innovative products or services to consumers at competitive prices. Nevertheless, by being successful, firms have attained a dominant position in the market and that may have meaningful implications from the perspective of antitrust or competition law. In that situation, the experience in many countries shows that innovation decisions by dominant market players can be second-guessed by competition authorities in search of anticompetitive behavior. This chapter assesses the limits and dangers competition law enforcers face in their investigations and sanctioning antitrust proceedings in the assessment of anticompetitive unilateral conduct by innovating firms.