Known Unknowns: Uncertainty and its Implication for Antitrust Policy and Enforcement in the Standard-Setting Context

Abstract

This article analyzes unilateral misconduct in standard-setting organizations, including in particular various forms of patent hold-up. The authors identify uncertainties facing agencies and courts reviewing such conduct and describe certain analytical frameworks that agencies can use to determine whether enforcement action is appropriate in a particular case. The article examines three key “unknowns”: whether a standard-setting process was abused or misused in some way; whether such misconduct, if any, had a significant adverse effect on competition; and what remedy, if any, would cure such competitive harm. The authors argue that agencies and courts should protect the reasonable expectations of other participants in the standard-setting process, should adopt a practical approach (a “substantial contribution” test) to problems of causation raised by misconduct in the standard-setting arena, and should favor compulsory licensing as a presumptive remedy in standard-setting cases, reserving others (such as disgorgement) for unusual cases in which compulsory licensing fails adequately to deter or remedy anticompetitive misconduct.