Research On Definition Of Relevant Markets

Under the background of Globalization of Knowledge Economy, technology-licensing activities is very common in the modern business activities. As an implementation process of modern antitrust law enforcement that cannot avoid, market definition problems have to be solved properly. What is the relevant market? What are the characteristics of relevant market related to technology licensing monopoly cases? How to accurately define the relevant market in such cases? Could traditional definition methods be applied in such cases? All of these are the problems to be solved when antitrust law enforcement agencies deal with technology licensing monopoly case. Although issued many acts which further enhanced the foundation of China's antitrust law enforcement, but these rules are still relatively crude and cannot meet the needs of technology licensing monopoly cases. Oct 2013, Huawei v. IDC exposed the negative impacts of monopoly case related to technology licensing completely. Practical difficulties and public opinion pressure become so urgent to make out how to define the fair scope of the relevant market, particularly to define the scope of technology licensing monopoly cases. With the precondition of frequent interaction of technology licensing and market competition, the paper analyzes the basic meaning of relevant market from multiple perspectives and tries to define the relevant market in technology licensing monopoly cases from product markets, technology markets and innovation markets. The full text is divided into the following chapters:Chapter 1. Interaction between technology licensing and market competition. With the background of globalization, technology licensing changes its supporting role in economic development. As the new normal state of economic development, knowledge competition should follow legal means to enhance competitiveness and protect its interests. However, too much legal protection will bring some conflicts and delay innovation steps. According to foreign cases, the strength state between intellectual property law and antitrust law still indicates a periodic variation. But this trend is not an ideal state for economic development, dynamic efficiency requires interaction between innovation and competition. When technology licensing and antitrust law interact, we need treat them equally. Only clear the basic mechanisms and means of market definition, in order to further understanding why we need to strengthen research on defining relevant market urgently.Chapter 2. Legal structure of market definition. Although technology licensing have positive role in increasing social welfare and promoting market competition. However abusing the dominance for market with licensing agreements will also limit and damage market competition. Therefore, antitrust agencies should investigate case with the characteristics of technology licensing, and first problem is how to define the relevant market. In other words, fmarket definition is the key proposition of enhancing antitrust law enforcement. And defining relevant market is a key step to implement this proposition.Chapter 3. The definition of the relevant product markets. Illegal competitive behaviors that regulate by antitrust law always occur within the scope of the relevant product markets. The types of product markets impacted by anti-competition effects of technology licensing include upstream product markets, intermediate product markets and final product markets. Traditional methods can be applied to define the scope of the relevant product market in technology licensing monopoly cases. But these applications should follow some features about licensed technologies. Firstly, how to determine the benchmark price of SSNIP test in technology licensing monopoly cases; secondly, we must pay attention to consumer preferences aroused by intellectual property; finally, when the reaction of price is sensitive, we need focus on the function of commodities rather than prices for relatively strong substitution.Chapter 4. The definition of the relevant technology markets. With the full integration of traditional commodities and diverse intellectual property rights, single dimension of relevant product market has been difficult to fully reflect the scope of firms' competition activities. Similar with product markets, the relevant technology markets consist of the licensed technology and its close substitutes. Therefore, we can apply traditional methods into defining the relevant technology markets. But the reaction of the royalty is not sensitive and cannot represent the reflection of the whole licensing agreements. So defining the relevant technology market cannot blindly apply SSNIP test and should apply rational substitution analysisChapter 5. The definition of the relevant innovation markets. According to without any transactions involve product or technology, relevant innovation markets are not competitive market in the traditional sense. But Gilbert and Sunshine still created a method named small but significant and non-temporary reduction of innovation to define the boundary of relevant innovation market. But 2010 Horizontal Merger Guidelines showed that reducing innovation could serve as a foundation for competition enforcement. Owing to the uncertainty of R & D activities, antitrust agencies gradually found a reasonable analysis based on firm's research capabilities and other market conditions rather than always focus on market definition. This method use specific market conditions to analysis different cases and then can find a further influence for R & D with a more comprehensive perspective.Chapter 6. Market definition and modernization of antitrust law. The concept of relevant market does not appear at the beginning of the antitrust law, but accompanied by a massive enforcement experience accumulation and development of industrial organization theory. The appearance of relevant market had greatly improved the scientific of U.S. antitrust enforcement and been introduced to the others national antitrust agencies. But market definition cannot solve all the antitrust issues. And it is just a fiction process for real market activities for judging and implementing these fiction facts. Regardless of how to improve this fiction process, it always lost some information and makes the defined scope different from the real scope. On the other hand, we cannot completely abandon market definition in the implementation of antitrust law; especially new analysis tools and methods continually appear. Therefor, this chapter reviews the Opinion Soliciting Draft and gives some suggestions.