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Competition Law and the Regulation of Technology Markets

 |  November 18, 2011

Just in the time for the holidays, we thought our readers might be interested in this book review:

Competition Law and the Regulation of Technology Markets, Kevin Coates, 448 pages, April 2011, 978-0-19-957521-3, Hardback

Review written by Timothy R.W. Cowen, Partner, Sidley Austin LLP

It is clear that this book is both up to date and has been deeply thought through. This is without doubt the work of someone who has spent many years dealing with cases and the issues that they raise at the cutting edge of the law and policy in the sector. It is welcome as a work of rare insight and expertise.  It is also a clear book addressing a number of complex subjects in the one place. The title poses the conundrum: ‘Competition law and the Regulation of Technology Markets’.  This is a conundrum because it could be argued that the book is concerned with technology law. Whether there is such a things as technology law or law that applies to technology markets is a question posed at the outset and one to which this review will return to below.

It starts by outlining the areas of law that are the most relevant for the technology sector and takes a ‘joining-the-dots’ perspective: cutting across economic policy and the theory that underlies competition law, competition law and its application to the technology cases, both in the US and the EU, and cutting across intellectual property rights and in particular the interface between intellectual property and competition law. This provides a strategic or ‘horizontal’ perspective starting with the law as it applies to the sector and illustrating the law with relevant cases. It then deals with a set of ‘vertical’ industry specific issues that arise and which are specific to the technology sector such as in the areas of standards, and interoperability and later on dealing with issues such as price squeeze and net neutrality. In the part of the book looking at access and interoperability it provides a useful outline of the controversies that have taken place in what has often been a heated debate behind the scenes.  Issues are addressed with interesting illustrations from US and EU cases, as is product design. Again, this is an industry specific area often overlooked by competition lawyers, data protection or  technology lawyers, but an area where the law is increasingly likely to focus in the future. Compliance by design may well be an area for future development  given the difficulty of tracking monitoring and enforcing the law in technology markets.

One wonderful aspect of this work is that it is so up to date. The most recent cases are referred to and placed in the context of current investigations. In particular the US and EU investigations of Microsoft, Intel and most recently of Google, are addressed in detail.

Antitrust investigations into the technology sector are some of the most high profile investigations of all, and provoke widespread argument and controversy.  Businesses seek to claim that the sector is so dynamic that it should be left alone and so competitive that the market resolve any issue. While it is recognized that it is a real challenge for the competition authorities to take on the task of ‘Trying to shoe a galloping horse’, it is a task that they have been given and one that has to be discharged. How and why they have done so in recent years is thoroughly explained in a coherent and thoughtful way.

As indicated at the outset of this review, one issue for every lawyer approaching this area, (and which is pointed out in the introduction) is whether there is any such thing as technology law; Judge Easterbrook’s famous comment that there is no law of  the internet, or for that matter any such thing as the law of ‘technology markets’, but only law that applies to technology markets  is a profound observation. As discussed throughout the book there is no more a law of the internet than there is a ‘law of the horse’. This book deals with the law as it applies to the technology markets, then looks at the issues raise, from, if you like, the perspective of the horse. Looking at the law from the point of view of the horse is very helpful in understanding the issues and vital for any business seeking to understand the law that applies to them and then to comply with the law. This is a current issue for businesses that have not sufficiently designed their businesses or taken the law into account,  and one that overly tidy minded lawyers ignore at their peril. Lawyers in particular are susceptible to the delusion that narrow definitions provide comforting specializations and that that is enough. In technology markets in particular, being an expert in one aspect of the law is insufficient to help businesses or competition authorities or the courts to resolve the issues that they have to deal with.  There are many areas that need to be mastered before an intelligent outcome can be either presented, proposed or decided.

Of course, it is also recognized that the law that applies to horses is one that requires those involved, be they the horse and the lawyer, to understand both the law and the horse.   This book is admirable in seeking to tackle so much , and is extraordinary in doing it so well and so succinctly.