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Antitrust cases, including recent complaints filed against dominant technology platforms, have alleged conduct that harms innovation. Section 2 of the Sherman Act is sufficiently broad to address conduct that harms innovation, but courts have little experience adjudicating such allegations. This article briefly reviews the economics literature regarding the effects of market power on innovation incentives. We identify circumstances in which structural conditions warrant a presumption that anticompetitive conduct by a dominant firm is likely to harm or promote innovation and describe various ways in which consideration of likely innovation effects might support finding an antitrust violation or provide a defense of otherwise anticompetitive conduct.
Doug Melamed is Professor of the Practice of Law at Stanford Law School, where he has been a member of the faculty since 2014. From 2009 until 2014, he was Senior Vice President and General Counsel of Intel Corporation and was responsible for overseeing Intel’s legal, government affairs, and corporate affairs departments. Prior to joining Intel in 2009, he was a partner in the Washington, D.C., office of WilmerHale, a global law firm in which he served as a chair of the Antitrust and Competition Practice Group. He joined WilmerHale’s predecessor in 1971. From 1996 to 2001, Doug served in the U.S. Department of Justice as Acting Assistant Attorney General in charge of the Antitrust Division and, before that, as Principal Deputy Assistant Attorney General. He has written numerous widely-cited articles on antitrust law, patent law, and law and economics. He was the Florence Rogatz Visiting Professor in the Practice of Law at Yale Law School in 2017.
Richard Gilbert is Emeritus Professor of Economics at the University of California at Berkeley. From 1993 to 1995 he was Deputy Assistant Attorney General in the Antitrust Division of the U.S. Department of Justice, where he led the effort that developed joint Department of Justice and Federal Trade Commission Antitrust Guidelines for the Licensing of Intellectual Property. Professor Gilbert’s current research is on competition policy for innovation and intellectual property. Professor Gilbert served as Chair of the Berkeley Economics Department from 2002 to 2005, President of the Industrial Organization Society from 1994 to 1995, and the non-lawyer representative to the Council of the Antitrust Section
of the American Bar Association from 2011 to 2014. He is the author of numerous research papers and the book Innovation Matters: Competition Policy for the High-Technology Economy. Professor Gilbert has testified before Federal and State courts and regulatory agencies and the U.S. Congress. He holds a Ph.D. in Engineering-Economic Systems from Stanford University and Bachelor of Science and Master of Science degrees in Electrical Engineering from Cornell University.
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