Technical Standard Setting Organizations and Competition: A Case for Deference to the Market

Interoperability, Competition Policy and Antitrust and Standards

Article Snapshot

Author(s)

Raymond Nimmer

Source

Working Paper, 2009

Summary

This paper asks how setting standards affects competition.

Policy Relevance

Setting a standard can hinder competition and cause antitrust problems. Waiting for markets to select the best technology before setting a standard works best.

Main Points

  • Technical standards describe techniques firms must use to build products that work together. Technology becomes standard through selection by a standards-setting organization (SSO), or simply by being widely used (de facto standard).

 

  • Each competing firm might urge the SSO to adopt technologies that will benefit that firm. Lobbying an SSO is not protected free speech (the Noer-Pennington doctrine).

 

  • To avoid antitrust problems, SSOs should avoid choices that exclude competitors. In a competition between technologies, SSOs should wait for one to prevail in the market.

 

  • The XML standards debate involved competition between open source and proprietary technology. The SSO should retreat, confining itself to describing any consensus.

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