The Library

The interaction between antitrust and intellectual property : the interoperability issue in the Microsoft Europe case

Tools

Scopelliti, Alessandro Diego (2010) The interaction between antitrust and intellectual property : the interoperability issue in the Microsoft Europe case. Working Paper. Coventry: University of Warwick. Dept. of Economics. Warwick economics research paper series (TWERPS), Vol.2010 (No.924).

PDF
WRAP_Scopelliti_twerp_924.pdf - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader
Download (433Kb)

Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...

Abstract

The present work analyzes the interaction between antitrust policy and intellectual property protection, with particular reference to the cases of refusal to supply, when it concerns ideas or inventions protected by an IP right. For this purpose, the paper preliminarily discusses the governing principles of antitrust policy on abuse of dominance and refusal to deal, as they have been implemented in the decisions of the EU Competition Authority, and it presents the specific issues related to the implementation of antitrust policy in the innovative industries. Then, the paper examines in particular the Microsoft Europe Case, as decided by the European Commission in 2004, focusing on the issue of the interoperability between the operating systems for personal computers and the operating systems for work group servers. The theoretical model, developed as an extension of the framework proposed by Choi and Stefanadis (2001) to the case of refusal to deal, suggests an explanation of the case, alternative to the one adopted by the Commission, if not necessarily in the final outcome of the decision, at least in the analytical arguments and in the dynamics of the market structure. In particular, we show that the refusal to supply the compatibility between the two complementary products was determined not only by the intention to leverage its dominant position to the adjacent market of server operating systems, but especially by the concern for keeping the monopoly on its core market, that is the one of PC operating system, given the future evolution of the software market, due to the diffusion of cloud computing.

Item Type:

Working or Discussion Paper (Working Paper)

Subjects:

K Law > K Law (General)

Divisions:

Faculty of Social Sciences > Economics

Library of Congress Subject Headings (LCSH):

Antitrust law, Intellectual property, Microsoft Corporation -- Trials, litigation, etc., Operating systems (Computers)

Series Name:

Warwick economics research paper series (TWERPS)

Publisher:

University of Warwick. Dept. of Economics

Place of Publication:

Coventry

Official Date:

2010

Dates:

Date	Event
2010	Published

Volume:

Vol.2010

Number:

No.924

Status:

Not Peer Reviewed

Access rights to Published version:

Open Access

References:

- Anderman S. D. and Schmidt H. (2007), EC Competition Policy and IPRs, in Anderman S. D.
(2007) (edited by), Intellectual Property Rights and Competition Policy, Cambridge University
Press
- Carlton D. W. and Waldman M. (2002), The Strategic Use of Tying to Preserve and Create
Market Power in Evolving Industries, Rand Journal of Economics, Vol.33, pp.194-220
- Choi J. P. and Stefanadis C. (2001), Tying, Investment and the Dynamic Leverage Theory, The
RAND Journal of Economics, Vol. 32, No.1, pp.52-71
- Costa S. (2003), La Difficile Eredità del Caso Microsoft: le Questioni Teoriche e i Rapporti tra
Economia e Diritto della Concorrenza, Atti della XV Conferenza della Società Italiana di
Economia Pubblica, Pavia, 3-4 Ottobre 2005
- Encaoua D. and Hollander A. (2002), Competition Policy and Innovation, Oxford Review of
Economic Policy, Vol.18, No.1
- Etro F. (2007), Competition, Innovation and Antitrust, Springer - Verlag
- Etro F. (2008), Market Leaders, Antitrust Policy and the Software Market, The ICFAI Journal of
Industrial Economics, Vol. 5, No.1
- Etro F. (2009), Endogenous Market Structures and the Macroeconomy, Springer - Verlag
- Evans D. S., Nichols A. L. and Schmalensee R. (2001), An Analysis of the Government s
Economic Case in U.S. versus Microsoft, Antitrust Bulletin
- Fisher F. M. and Rubinfeld D. L. (2000), United States versus Microsoft: An Economic Analysis,
in Evans D.S., Fisher F. M., Rubinfeld D. M. and Schmalensee R. (2000), Did Microsoft Harm
Consumers? Two Opposite Views, AEI Brooking Center for Regulatory Studies
- Genakos C., Kuhn K. U. and Van Reenen J. (2007), Leveraging Monopoly Power by Limiting
Interoperability: Theory and Evidence from Computer Markets, Working Paper, Centre for
Economic Performance, London School of Economics
- Gilbert R. J. (2008), Competition Policy for Intellectual Property, in Buccirossi P. (2008) (edited
by), Handbook of Antitrust Economics, MIT Press
- Gilbert R. J. and Katz M. L. (2001), An Economist s Guide to U.S. versus Microsoft, Journal of
Economic Perspectives, Vol. 15, No. 2, pp.25-44
- Gual J., Hellwig M., Perrot A., Polo M., Rey P., Schmidt K. and Stenbacka R. (2005), An
Economic Approach to Art.82, Report by the Economic Advisory Group on Competition Policy
- Kallay D. (2004), The Law and Economics of Antitrust and Intellectual Property, Edward Elgar
Publishing
- Katz M. L. and Shapiro C. (1998), Antitrust in Software Markets, in Eisenach J. A. and Lenard T.
M. (edited by) (1998), Competition, Innovation and the Microsoft Monopoly: Antitrust in the
Digital Marketplace, Kluwer Academic Publishers
- Korah V. (2006), Intellectual Property Rights and the EC Competition Rules, Hart Publishing
- Kuhn K. W. and Van Reenen J. (2008), Interoperability and Market Foreclosure in the European
Microsoft Case, in Lyons B. (2008) (edited by), Cases in Competition Policy: the Economic
Analysis, Cambridge University Press
- Lévêque F. (2005), Innovation, Leveraging and Essential Facilities: Interoperability Licensing in
the EU Microsoft Case, World Competition, March
- Motta M. (2004), Competition Policy. Theory and Practice, Cambridge University Press
- O Donoghue R. and Padilla J. (2006), The Law and Economics of Art.82 EC, Hart Publishing
- Régibeau P. and Rockett K. (2007), The Relationship between Intellectual Property Law and
Competition Law, in Anderman S. D. (2007) (edited by), Intellectual Property Rights and
Competition Policy, Cambridge University Press
- Segal I. and Whinston M. D. (2007), Antitrust in Innovative Industries, American Economic
Review, Vol.97, No.5
- Tirole J. (1988), The Theory of Industrial Organization, MIT Press
- Vickers J. (2009), Competition Policy and Property Rights, Discussion Paper, Department of
Economics, University of Oxford
- Viscusi W. K., Harrington, J. E., Vernon, J. M., Economics of Regulation and Antitrust, Fourth
edition, Cambridge, Massachusetts, The MIT Press
- Whinston M. D. (1990), Tying, Foreclosure, and Exclusion, American Economic Review, Vol.
80, No. 4.