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Mark Nelson, May 12, 2008
Ensuring the interoperability of products can be critical to the success of many industries, in particular to encourage the rapid uptake of new technologies. To achieve such interoperability and the efficiencies that come with it, industries often use standard-setting organizations (“SSOs”) to select a particular technology as the “standard” to which all products must conform. By creating uniform standards, SSOs advance the pro-competitive goals of encouraging competition among manufacturers of products that use new technologies and allowing for accelerated development of new technologies or new generations of existing technologies. On the other hand, in deciding which technologies should comprise a standard, cooperative standard-setting efforts replace the forces of competition that would otherwise determine which technologies will be deployed in the market. In short, the function of most SSOs is to evaluate alternative technologies and select a single “winner” to become the new standard and, as a result, foreclose alternative technologies. While such efforts are typically pro-competitive and efficiency-enhancing, it is critical for antitrust law to play a role in policing standard-setting conduct to ensure that the process is not abused through improper collusion or deceptive efforts to obtain monopoly power. Subscribers can download the entire article available in the column on the left.