By John B. Kirkwood, J. B. Kirkwood
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Extra resources for Antitrust Law and Economics, Volume 21
This recognition of the primacy of consumer interests – or, as it is most frequently expressed, of “consumer welfare” – is important. It means that many courts have implicitly defined competition as a process that promotes the welfare of consumers. Under this definition, a practice is “anticompetitive” only if it harms consumers and it is “procompetitive” only if it benefits consumers. Although the number of cases that have articulated this consumer perspective is not overwhelming, it has appeared consistently over the last 25 years in federal decisions at all levels, including decisions in a majority of the appellate circuits, and there does not appear to be any significant authority to the contrary.
61 By giving patents a limited life and by making them contestable, therefore, Congress and the courts have effectively embodied a balance between static and dynamic efficiency in the patent laws. Under this analysis, lump-sum settlements that maintain the monopoly outcome cannot be justified. They may enhance dynamic efficiency, but they both depress static efficiency and depart from the congressional and judicial balance in a critical way. By excluding entrants from the market, they substitute a private, conclusive determination of patent validity for the rebuttable presumption.
Which of these circumstances is more likely? And what is the net impact on consumers when non-cost-justified discrimination has both beneficial and adverse effects? Empirical evidence on these questions is sparse. In a review conducted in 1990, Scherer and Ross found that the statistical evidence on the impact of countervailing power was limited and conflicting. Based on this evidence, the authors could only conclude that bargaining power sometimes benefits consumers, even when the discrimination is unjustified (pp.
Antitrust Law and Economics, Volume 21 by John B. Kirkwood, J. B. Kirkwood