How Antitrust Enforcement Can Spur Innovation: Bell Labs and the 1956 Consent Decree

Watzinger, Martin; Fackler, Thomas A.; Nagler, Markus und Schnitzer, Monika (2020): How Antitrust Enforcement Can Spur Innovation: Bell Labs and the 1956 Consent Decree. In: American Economic Journal-Economic Policy, Bd. 12, Nr. 4: S. 328-359

Abstract

Is compulsory licensing an effective antitrust remedy to increase innovation? To answer this question, we analyze the 1956 consent decree that settled an antitrust lawsuit against Bell, a vertically integrated monopolist charged with foreclosing the telecommunications equipment market. Bell was forced to license all its existing patents royalty-free, including those not related to telecommunications. We identify the effect of the consent decree on follow-on innovations building on Bell patents by using exactly matched non-Bell patents as control group. We show that the consent decree led to a lasting increase in innovation but only in markets outside the telecommunications sector.

• Dokumententyp: Zeitschriftenartikel
• Fakultät: Volkswirtschaft
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• ISSN: 1945-7731
• Sprache: Englisch