The Problem of Oligopsonistic Collusion in a Weak Patent Regime

Abstract

The collective behavior of a group of technology industry oligopolists to fix input prices of patented technology so as to increase profits and constrain competition is analyzed in light of antitrust cases. The antitrust laws and the patent system are seen as complementary, with antitrust laws constraining dominant firms and patents enabling market entry. A set of remedies for oligopsonistic collusion are reviewed.IndexIntroduction: Two Complementary Logics to Promote Competition: Antitrust Law and Patent Law 2I) Antitrust Law at the Crossroads of Patent Law 6A) Anti-Competitive Behaviors Across the Industry Cycle 12B) Macro-monopoly and Micro-monopolies 16II) Economic Analysis of Anticompetitive Behaviors 23A) Suppression of Competition with Vertical Price Constraints 27 B) Oligopolist Price Fixing and Demand Elasticities 29C) Deadweight Loss from Inefficient Competition 33III) Oligopsonistic Collusion to Suppress Entrants 34A) Oligopsonist Refusal to Deal as Antitrust Abuse 40B) Collective Behavior of Oligopsonists to Fix Input Prices by Weakening Patent Rights 48C) Effects of Oligopsonistic Collusion 54D) Anticompetitive Behaviors of Foreign Oligopolists 56IV) Antitrust Remedies for Oligopsonistic Collusion 61A) Measuring Antitrust Injury of Oligopsonistic Collusion 62B) Assessing Damages for Anticompetitive Oligopsonistic Behaviors 68V) Incumbent Compulsory Licensing: Essential Facilities after Trinko 70A) The Failure of FTC Action on Xerox 71B) Essential Facilities of Technology Monopolist Directed to Market Entrants: Regulatory Solutions and the Duty to Deal 75