Browsing by Subject "cartels"

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  • Fellman, Susanna; Shanahan, Martin (2020)
  • Havu, Katri (2020)
    Damages disputes related to breaches of EU competition law are heard by Member State courts that apply a combination of EU and national law to these cases. Recently, the European Court of Justice handed down a preliminary ruling concerning who is liable to compensate harm caused by competition infringements (Skanska (C-724/17)). Importantly, the ruling confirms that EU competition law, and not national legislation, dictates which legal entities are responsible for damages. Moreover, the ruling indicates that the broadly interpreted concept of “undertaking” and the principle of economic continuity—traditionally discussed in the sphere of public enforcement of EU competition provisions—are also relevant in the context of private law claims. These clarifications are invaluable, because the issue of those liable for damages has not previously been addressed in a detailed manner, and the extent to which EU law, as opposed to national rules, governs this area has not been clear. This contribution explores the Skanska ruling and its theoretical and practical implications.
  • Toikka, Juuso (2004)
    In this thesis we analyze how patent policy affects the strategic behavior of firms. We develop an infinite horizon model of innovation where each period firms are randomly matched to ideas which can be developed into innovations. The model allows for simultaneous independent discovery so that the number of firms producing the same innovation is determined endogenously. The issues that we consider are (1) innovators' optimal choice of protection between patents and (trade) secrecy, and (2) the effect of patents on the firms' ability to sustain tacit collusion. In studying the choice of protection, we find that firms may find it optimal to patent even if patent protection is weaker than protection under secrecy. This follows because of the prisoner's dilemma created by the patent policy: If no one else patents, the firm gets the patent and the corresponding monopoly profits for sure whereas secrecy yields only oligopoly profits in the event that there are others that have developed the same innovation. On the hand, if the competitors patent when successful, then secrecy yields positive profits only when no competitor is successful with the same innovation. Applying for the patent gives the innovator a chance of receiving a monopoly even when others are successful. This explains how the patent policy can at the same time enhance incentives to innovate and increase the spreading of information through increased spillovers. We show that welfare maximizing patent policy may either reduce or increase spillovers. Turning to the effects of patents on the competitiveness of an industry, we argue that a patent system makes collusion among innovators more difficult. Our argument is based on two properties of the patent system. First, a patent not only protects against infringement but also against punishment by former collusion members. Second, a deviator has an equal chance with the former collusion members to get a patent on future innovations. We show that if a patent system reduces spillovers, it renders collusion impossible. Moreover, it is possible to design a patent system that simultaneously increases knowledge spillovers and eliminates collusion.