Standards and Market Power

Posted by D. Daniel Sokol

Cecilio Madero Villarejo & Nicholas Banasevic (European Commission, DG Competition) write on Standards and Market Power.

ABSTRACT: Standards play an increasingly significant role in the modern economy, in particular in the high-tech sector. They ensure that products in an increasingly inter-connected world can work together properly, and therefore allow companies to concentrate on producing innovative products to the benefit of consumers.

However, standardization may also confer market power on an essential patent holder which he may not otherwise have possessed. This paper therefore examines what the associated antitrust implications are, and what lessons antitrust regulators and standards bodies might draw.