New Fault Lines in Antitrust: The Rising Threat of Growing Divergence to IP-Centric Business Practices

By Paul Lugard & David Gabathuler

The last two decades have shown a remarkable degree of convergence in the area of antitrust enforcement and the dissemination of antitrust regimes around the globe has brought significant welfare gains. However, the wide adoption of antitrust regimes as a preferred model for economic regulation also comes at a price: as a result of the multitude of agencies that may each claim jurisdiction over particular transactions, the potential for incorrect and inconsistent outcomes and “system clashes” increases. International, IP-centric, and innovation-intense business transactions are the most likely recipients of the negative consequences of these frictions. It is in our view highly questionable whether the current, traditional cooperation mechanisms are in and of themselves sufficient to avoid major frictions between jurisdictions. The call for supplemental bilateral and multilateral mechanisms to ensure effective, coherent, and economically rational antitrust enforcement, such as the proposal for a Multilateral framework on procedures in competition law investigation and enforcement, is legitimate and should be taken seriously and further explored.

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