Environmental Engineering Reference
In-Depth Information
monopoly or the abuse of market power. Goods
markets include the final or intermediate goods
produced with the technology or markets for raw
materials or components used in the goods. Tech-
nology markets include markets for intellectual
property (IP) or substitute technologies that are
used as factors in producing goods/services. In-
novation markets include markets for investment
in research and development (R&D) intended to
develop technologies for goods/services that do
not yet exist, including the anticipatory standards
requiring compliance by the goods/services.
Innovation markets also include the attraction
of investment into R&D for improvements and
products that would address un-served geographic
markets (DoJ/FTC 1995).
Antitrust regulators, particularly in the U.S.
where the enforcement and interpretation of an-
titrust law is longstanding, robust, and compara-
tively well-developed, will likely begin analysis
by examining the price elasticity of final products/
services, in final and intermediate goods/services
as well as in consumer and industrial markets. In
addition to regulatory review, private parties in
the U.S. may also challenge SDA or other col-
laborative activities. Such private rights of action
are also expected to become available in the near
future throughout the EU. An SDA or licensing
activity would be suspect under such antitrust
scrutiny if the market is already concentrated and
demand is not sensitive to price changes. An in
depth antitrust analysis would be necessary to
determine close substitutes as well as potential
competitors, which could readily adapt to enter
such markets. Consumer markets include mostly
final products/services that consume energy, emit
pollutants, or might benefit through recycling.
Industrial markets include the production of in-
termediate and final goods sold to business enti-
ties that abate pollution, test for emissions, and
perform the actual recycling activities. For ex-
ample, standards requiring licensing of Blue Tec
technologies for passenger diesel engines impact
final consumer goods markets. By contrast, stan-
dards that license sulfur reduction technologies
for diesel distillates, needed for compatibility with
Blue Tech engines, are directed to petroleum
refineries that reside in intermediate, industrial
markets.
When the above analysis of product/service
markets is inconclusive, antitrust regulators may
next turn to the analysis of technology markets to
determine the competitive impact of collaborative
activities like SDA. Technology markets clear
transactions between sellers and buyers of IP
through assignment or licensing that is separate
from the products in which the IP is embodied.
Technology markets also include close substitute
technologies which can broaden the relevant
market making it less likely that the owner of any
particular technology possesses extensive market
power. While the relevant market analysis of final
products can fairly reliably expose transaction
volume and prices as the predominant measures
of market power, technology markets are less
transparent due to the form of transaction often
undertaken. For example, license prices are often
opaque making them not easily quantifiable in
monetary terms (DoJ/FTC 1995). The license
price for a particular technology may not be clearly
stated and this reveals no transaction volume to
meter payment streams or market shares. Some
SDA participants may create cross-licensing ar-
rangements or negotiate patent pools or other forms
of IP pooling in a package license arrangement that
hide the contribution of any particular component
technology in the package. These problems are
discussed more fully below.
The evaluation of innovation markets has even
more challenging difficulties with transparency.
Antitrust enforcement based on R&D markets is
the least likely mode of enforcement. Neverthe-
less, when analysis is inconclusive after a focus on
product/service markets and technology markets,
the innovation markets may be examined. R&D/
innovation markets attract competitor collabora-
tion in joint ventures, SDA or IP pools that would
