Competition can boost and support innovation

Competition can boost innovation

Competition policy and enforcement can be beneficial to innovation by, for example, ensuring firms, particularly new entrants, get access to fair terms. For example, in many countries, professions such as lawyers, doctors, pharmacists and opticians are subject to restrictions many of which were originally introduced under the guise of public safety, but which have developed into restrictions on innovation. Lifting these restrictions can encourage the professions to think innovatively, for example through extended opening hours, more convenient locations or online service provision.

Competition policy and enforcement can help market access

It can reduce the ability of large firms to use their market power over small and medium sized firms. It can promote the fair setting of standards.  It can enable market entry can limit particularly pernicious negative effects of some industrial policy actions. For example, it keeps competitors from colluding and can create safe harbors for technology transfer agreements. It can, through such tool as state aid control, can be used to improve the performance of economic sectors in a controlled way.

The interface with Intellectual Property law is key

Intellectual property rights are temporary monopolies that by their nature restrict competition. However, they are pro-competitive in their ability to encourage innovation, reward for invention and creative activities. This means that competition law has to take a balanced view of the costs and benefits of the particular restriction and should be enforced against practices where intellectual property rights are being used as instrument for distort competition beyond the right granted by the patent, copyright or trademark