A Brief Note on U.S. and EC Competition Policies and Their Impact on Innovation

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C. Boyden Gray, Jul 12, 2008

Although U.S. and EC antitrust law have converged considerably in the last few years, significant differences remain in the treatment of dominance under Article 82 of the EC Treaty. This difference is perhaps best illustrated by the number of dominance cases brought in the European Community in the high-tech arena against U.S. companies at the behest of other U.S. high-tech companies whose complaints have fallen on deaf ears in the United States. EC competition law experts defend this divergence as necessary to trigger innovation in the European Union and to protect consumers. The obvious question raised is whether EC competition law has anything to do with spurring innovation in the European Union (and whether it may not in fact discourage innovation). The question comes to mind because all of the high-tech complainants and their target defendants are U.S. companies, suggesting that the absence of breakthrough EU companies in the high-tech space is evidence not of the success of EU innovation policies but of their failure. The point to be made in this article is not so much that EU competition enforcement may have discouraged innovation as that it may have simply distracted attention from other, much more important policies in the European Union that have made it more difficult for entrepreneurs to succeed there than in the United States. The irony of the dominance cases, in shor…

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