Competition in the Software Industry

Competition in the Software Industry:

the Interface between Antitrust and Intellectual Property Law (*)

Luis M. PORTERO SÁNCHEZ

LL.M. College of Europe

s Introduction

Computers play a very important role in today's world and their importance is likely to increase over the years. Among the industries related in some way to computers, software is maybe the best example of fast development. Indeed, the software industry has displaced the manufacturing of hardware as the first sector in terms of sales revenues. As it is often the case for new technologies, the growth of the software industry has raised a number of questions of legal and economic nature. Particularly, issues of competition policy are currently the object of a harsh dispute bringing up arguments which go beyond the limited scope of an antitrust suit. The economic features of the software markets are seen by many as a perfect example of how numerous market imperfections exist, and the theories of the Chicago School are ultimately challenged. If we followed some of the fervent opinions that are being expressed, a new model of state intervention in the economy should eventually be adopted.

(*) This article summarises the conclusions of my Master's Thesis of the same title, drafted in April 1998, and publicly available at the Library of the College of Europe in Bruges. I would like to thank here Prof. K.W. Grewlich for his helpful comprehension and continuous support.

COMMUNICATIONS & STRATEGIES, no. 35, 3rd quarter 1999, p. 45.

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COMMUNICATIONS & STRATEGIES

This broader aspect of the discussion is underlying the subject-matter covered by this article, which studies the intersection of intellectual property and competition law in the software industry. Competition policy choices are present in both fields and sometimes problems of co-ordination arise in their application. The design and enforcement of both antitrust and intellectual property laws must be considered together by any...