Standard-Setting Organizations and the Failure of Price Competition

Alan Devlin, Government of the United States of America - Courts of Appeals

10/09/2009
(Original Publish Date: 7/4/2009)

This Article contrasts the SSO with alternative standard setting processes, examines the importance of price competition in network effect driven markets, and asks how intellectual property and antitrust policy should seek to address the critical failure of RAND licensing. In particular, there is a pressing need for reduced antitrust oversight with regard to royalty negotiation. Having established this normative foundation, the Article traces recent steps taken by the legislative, judicial, and executive branches to remedy the problem and compares these measures with the social optimum. Ultimately, it concludes that RAND licensing should be discarded as an SSO practice. In this regard, the 2008 decision of the D.C. Circuit in Rambus, Inc. v. FTC is highly notable, certainly for its undermining of the Third Circuit's 2007 holding in Qualcomm, but more fundamentally for its status as a squandered opportunity.