Thursday, May 27, 2021

Innovation Under Section 2 of the Sherman Act

Innovation Under Section 2 of the Sherman Act

Richard Gilbert

University of California, Berkeley

A. Douglas Melamed

Stanford Law School


Antitrust cases, including recent complaints filed against dominant technology platforms, have alleged conduct that harms innovation. Courts, however, have little experience adjudicating such allegations. This article concludes that Section 2 of the Sherman Act is sufficiently broad to address conduct that harms innovation and describes various ways in which innovation might affect the determination of antitrust liability or provide a defense against anticompetitive conduct. The article briefly reviews the economics literature relating the effects of market power on innovation incentives and identifies circumstances in which structural conditions warrant a presumption that anticompetitive conduct by a dominant firm is likely to harm or promote innovation.

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