Predatory Innovation in the Digital Era

Abstract

The current wave of the industrial revolution has altered humankind in all ways possible. With evolution comes the possibility of conflict, especially when the intent is to eliminate competition rather than revolutionise the product or service delivery. One such conduct is predatory innovation, which involves an incumbent altering one or more technical elements of a product to limit or eliminate competition under the guise of innovation. Discourse on the topic suggests that the jurisprudence has not yet generalised the etiquette of predatory innovation, which resonates with the challenges encountered by antitrust practitioners while assessing such conduct. Thus, in this paper, we aim to examine conduct that is construed as predatory innovation, given its increasing relevance and undiscovered potential harm. We present economic literature that discusses different types of predatory innovation and describe economic tests that are equipped to assess anti-competitive harm. Subsequently, we conduct an in-depth review of select cases that exhibit predatory innovation. We conclude by suggesting a way forward for competition assessment of predatory innovation.