Innovation: An Antitrust Trojan Horse?

Abstract

Innovation is regarded as the spearhead of consumer benefit in a competitive market. However, a strategy of predatory innovation presents the innovator with a shower of opportunities to close down the market and drive out competitors, thereby directly affecting consumer sovereignty. An inquiry into the relationship between innovation and market structures is not only important to assess the impact of such forms of the market on innovative activities, but also for a well-founded and evidenced framing of principles of antitrust laws in respect of Intellectual Property Rights (‘IPRs’). Therefore, this article makes a case for the legal recognition, across jurisdictions including India, of predatory innovation in the context of high-tech markets to uphold the objectives of the antitrust regime, i.e., consumer welfare. The article traces the progressive steps taken by developed jurisdiction in this context and highlights how a similar approach could be adopted by India, fitting its current framework. This article, firstly, discusses the impact the market structure has on the motives and incentives for a manufacturer to innovate; secondly, brings forward the anti-competitive nature of predatory innovation in high tech markets; thirdly, advocates for the need for legal recognition of the conduct of Predatory Innovation while noting the counterarguments; lastly, concludes with identifying the effects of recognizing Predatory Innovation as anticompetitive conduct. Innovation, Predatory, Market Structures, Monopoly, Intellectual Property Rights, India, High-tech Markets, Interoperability, Platforms, Network Effects