Emerging Competition Policy Issues in Agricultural Biotechnology

Abstract

The increased importance of privately sponsored biotechnology research has led to mergers, strategic alliances, vertical coordination, technology licensing, and other changes among firms within the agricultural sector. The industry is in the midst of sweeping changes, and research and development has become a central driver. Competition concerns are emerging that had not existed in the past and will likely bring increased antitrust scrutiny. This article outlines the economic principles that underlie efficient competition, especially those in high-technology industries. It then uses these principles to analyze the new strategic practices that may trigger increased intervention under competition policy. In particular, the article considers the effects of mergers, research joint ventures, technology licensing, and product tying and bundling.