General Purpose Technologies and Competition Law

General Purpose Technologies and Competition Law

The workshop is co-organized by the Centre for Law, Economics and Society at UCL Laws, the FGV Law School in Sao Paolo and the HSE/Skolkovo Institute for Law and Development. It will take the form of an interactive discussion, after a couple of introductions to each specific topic.

The development of General Purpose Technologies, such as the steam engine, railways, electricity, computing, the Internet, Artificial intelligence, biotechnology, usually leads to disruptive innovation and ultimately to important increases in productivity that provokes important spill-over effects to various industries and markets (Jovanovic & Rousseau, 2005). The term has been employed extensively recently in order to analyse the role of technology in economic growth. Bresnahan and Trajtenberg (1996) argue that GPTs should have the following characteristics:

-          “Pervasiveness”, as the idea is that the GPT should spread to most sectors of the economy;
-          “Improvement”, as the GPT becomes better over time, the costs of using it being reduced;
-          “Innovation spawning”, as the GPT should make it easier to invent and produce new products or processes.

The process of diffusion of a GPT may take a considerable period of time and may lead to entrenched positions for “lead firms” that have early invested on the exploitation of that technology. These firms control GPT clusters, the technology being applied in various economic sectors that will eventually form part of their value nets or value chains. The interactions between the “dominant” or “lead” firms and their application sectors are quite complex. Early technical choices made at the time of the adoption of GPT may create path dependencies and constrain choices at a later process when the GPT has spread and is implemented in various sectors of economic activity. This may lead to “growth bottlenecks” that are exploited by “dominant” or “lead” firms. However, the application sectors may also be a source of competitive constraint to these “dominant” or “lead” firms. Their position is not challenged by new technologies in direct competition with the lead firm’s one but by firms attempting to meet unserved demand outside the original GPT cluster (Bresnahan & Yin, 2016).

This “vertical” competition (Lianos, 2017) may take different forms and does not only correspond to competition within a relevant product market or, even more broadly, an industry, with the aim to lower costs per unit of output so as to gain more market share and in principle raise the rate of return of the capital invested. One may distinguish between competition within an industry, which compels individual producers to lower costs so that they can compete effectively, thus leading to a turbulent equalization of selling prices while profit margin and profit rates are dis-equalized, some firms being more efficient than others, and competition between industries (hardware v. sofware for instance), capital moving from one industry to another in search of higher profits.

Notwithstanding the fact that economic growth constitutes an important aim of competition law enforcement, in view of the increasing emphasis put on the necessary linkage between competition law and innovation, GPTs have not yet been systematically studied from the perspective of competition law. The development of GPTs may lead to important economic and social disruptions and significant periods of dominance of specific “lead” firms. These firms may use their power strategically so as to exclude potential horizontal and/or vertical competition and ensure that their central position remains uncontested. These GPTs also often emerge in developed countries and their diffusion to developing countries may be considerably slowed down or even stopped by “growth bottlenecks”. This has of course a considerable impact on social welfare and global social justice.

The aim of this conference will be to reflect on the way competition law applied to a number of GPTs in the past and understand how this past experience may be useful in assessing the challenges raised by current and future GPTs. The first panel of the conference will engage with the broader issue of GPTs, their impact on economic growth and will then focus, in view of the recent history of antitrust, in particular on the computer industry and Internet (including Internet of Things), but also some old history from which we can draw lessons from (e.g. internal combustion engine, electricity, railroad, automobiles). Part 2 will engage with artificial intelligence/machine learning, Big Data and blockchain and Part 3 will focus on lessons from the biotech industry and DNA design/editing technologies.

The Programme

13:15 - Registrations

13:45 -14:00 - Introduction
Professor Caio Mario da Silva Pereira Neto, FGV Law School
Professor Ioannis Lianos, UCL
Eduardo Caminati, President of Ibrac

14:00 - 15:30 - Part I: General Purpose Technologies and Competition Law: looking to the past as a window to the future (computer industry, Internet)
Moderators and Introductory Speakers:
Elizabeth Farina, President and CEO of the Brazilian Sugarcane Industry Association (UNICA)
Ioannis Lianos, UCL

15:30 - 17:00  -Part II: Coping with the governance of new technologies: Artificial intelligence, Machine Learning, Big Data, Internet of Things and Blockchain
Moderators and Introductory Speakers:
Eleanor Fox, NYU Law School
Paulo Furquim, INSPER

17:00 - 17:20 - Coffee Break

17:20 - 18:50 - Part III: Assessing innovation and convergence of the physical, biological and digital worlds: biotech industry, DNA design and gene-editing technologies (CRISPR)
Moderators and Introductory Speakers:
Leonor Cordovil, Grinberg, Cordovil Advogados
Dennis Davis, Competition Appeal Court, South Africa

18:50 -19:00 - Conclusion
Professor Marcio de Oliveira Júnior, Brazilian Senate
Professor Alexey Ivanov, HSE Skolkovo Institute for Law and Development



* Informamos aos participantes que o evento poderá ser fotografado e gravado em áudio e/ou vídeo e que os materiais produzidos poderão ser usados pela FGV Direito SP para divulgação institucional

  • 11/11/201712:30 - 18:00
    Auditório (Rua Rocha, 233, 2º subsolo, São Paulo - SP)


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