Property, Liability and Market Power: The Antitrust Side of Copyright

Abstract

This paper investigates the interplay between copyright law and antitrust law in two distinct respects. We first argue that the origin of copyright seems to be rooted not only in the need to foster the production and the spread of knowledge but also in the necessity of limiting market power on the side of distributors. We then show the potential impact on market competition of the evolution of copyright as a property rule. While property rules reduce transaction costs in the standard case of bilateral monopoly over the exchange of information goods, they might increase transaction costs. When coupled with market power, a property rule enables the right holder to control uses and prices so as to implement entry deterrence strategies against potential competitors. Conversely, we argue that reversing property rules in favor of competitors or switching to liability rules for copyright may restore competitive outcomes. This conclusion brings new insights on the application of the essential facility doctrine to copyrighted works 1.

Open Access, Social Norms & Publication Choice

“…Some scholars, challenging the standard legal definition found in nearly all national and international copyright laws, instead endorse a system that would make explicit the very complex web of contributions that go into a scientific paper. While certain disciplines such as the life sciences do have elaborate systems in place for listing contributors' names that disclose to the community the role of each author in the research, in other disciplines this is totally non-existent(Casati et al, 2011).5 On the industrial structure of academic publishing seeRamello (2010), while on the role of exclusivity in endogenously driving the market structure seeNicita & Ramello (2007).…”

The simple economics of class action: private provision of club and public goods

“…7 The solution involves an institutional reorganisation to produce a lowering of these costs and/or promote the-sometimes forced-reallocation of the rights. Examples of this are the aggregation of rights in the case of patent pools (Gallini 2011), and the compulsory licensing systems established for intellectual property, or for essential facilities in antitrust, as also the takings of private land (Nicita and Ramello 2007;Mercuro 1992). 8 By thus regarding victims as owners of ''property rights'' over a specific litigation, whose enforcement may incur costs exceeding the expected individual benefits, we can interpret class action as a system that follows a comparable judicial path to that described for property, aggregating the individuals' rights when their exercise on the judicial market is precluded (or limited) by contingencies which make the net benefit of the action negative.…”

Property rights and externalities: the uneasy case of knowledge

“…recording, film, publishing and other industry sectors). These situations are best understood in terms of a defensive leveraging strategy, specifically aimed at preserving and extending the incumbent's market power by increasing the asymmetry of costs and benefits between incumbents and new entrants (Nicita and Ramello, 2007). The final outcome of the aggregation of rights described above is to create a highly concentrated industry, in which a handful of players control the market; and since the investments made to achieve this market structure are non-productive, they constitute not just a dissipation of rents but also an additional social cost associated to market power.…”