ECN Brief

Germany | Innovations and competition law practice - meeting of the Working Group on Competition Law

Germany | Innovations and competition law practice - meeting of the Working Group on Competition Law

On 5 October 2017 the Working Group on Competition Law met in Bonn at the invitation of the Bundeskartellamt. At the meeting over 120 competition law experts discussed and exchanged views on the theme "Innovations - challenges for competition law practice."

The Working Group on Competition Law is made up of a large number of university professors from law and economics faculties, high-ranking representatives of national and European competition authorities and ministries, as well as judges from the antitrust divisions of the Düsseldorf Higher Regional Court and the Federal Court of Justice. For more than 40 years the group has met annually to discuss fundamental issues of competition policy.

Professor Dr Konrad Ost, Vice President of the Bundeskartellamt: "Innovations are of key importance for the competitiveness and growth of economies and businesses. In competition law practice we should not only focus on short-term price effects. Competition is meant to ensure freedom of choice for consumers and to protect and increase innovation potential. This applies just as much to traditional industries such as, e.g. crop protection, as it does to the modern platform economy. The issue of innovations and competition law will become even more important for us in the future."

This year's conference was chaired by Professor Dr Ost. The meeting featured introductory statements by and a panel discussion with Thomas Deisenhofer, Directorate-General for Competition at the European Commission, Professor Dr Josef Drexl, Max-Planck-Institute for Intellectual Property and Competition Law, Munich, Professor Dr Wolfgang Kerber, Philipps-University Marburg, Professor Dr Frank Maier-Rigaud, NERA Economic Consulting and Ms Birgit Krueger, Head of the General Policy Division of the Bundeskartellamt.

One of the topics discussed at the conference was how insights gained from industrial economics can be best applied in decision-making practice. In this context the participants agreed that account should be taken of the various roles which innovations can play in assessment practice, e.g. in the context of theories of harm, as a counterbalance to market power, or in the assessment of the efficiencies of a merger or cooperation. The group agreed that innovation processes generally entail a great deal of uncertainty and quantitative analysis methods are therefore difficult to apply to them. Many participants spoke out against a generalised application of economic findings to innovation competition and instead proposed developing different approaches for different sectors and types of proceedings in competition law practice based on individual cases.

Both from a conceptual perspective and using selected cases the group intensively discussed to what extent a direct link can be established between products still in the development stage and actual harm to competition in order to take adequate account of such products in an examination under competition law. The group concluded that in many cases protecting innovation competition and thereby ensuring production diversity (consumer choice) in the long term were often at least as important as protecting short-term price competition. It was also discussed on the basis of which concepts the optimal inclination for a competition authority to intervene in a case could be determined. In this context the prompt intervention of an authority to protect the competition process has to be weighed in each individual case against the free development of market dynamics in order to ensure fair competition.

The working paper which formed the basis for discussion and the individual statements of the conference participants are available (in German) for download on the website of the Bundeskartellamt.

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