Government at the Standard Bazaar

Stacy Baird, University of Hong Kong, Faculty of Law; University of Southern California, College of Letters, Arts and Sciences

10/16/2009
(Original Publish Date: 3/23/2009)

In recent years, there has been heightened interest in having government intervene in what has become primarily a market activity to mandate information technology standards. This article will provide an analytical framework by which government can consider such actions. I premise my proposal on the conclusion that government should be reluctant to intervene in the setting of information technology standards (and particularly, to mandate a particular standard that has not been developed and/or widely adopted by the market) because: (1) the relevant industries are sophisticated in regard to standards setting and have many well-developed types of standards, and forums in which to develop standards; (2) the U. S. government has a strong preference for market-developed information technology standards and promotes this preference as a matter of both domestic law and policy and foreign trade policy; (3) international trade agreements limit the degree to which participating governments can mandate standards; and (4) in contrast to the sophistication of the marketplace, government is rarely as informed, sophisticated in its understanding of the market, or nimble enough to respond to market conditions; therefore, the risk of government failure is significant, and indeed greatest where the market is young and dynamic, as is the case with regard to the current market affected by information technology standards.