Comparison of Wireless Standards-Setting–United States Versus Europe.

Zixiang (Alex) Tan, Syracuse University

9/05/2008
(Original Publish Date: 9/1/2001)

When decisions about developing standards are left to individual firms, there are many advantages including a flexible response to market evolution, accommodation to rapid technology change, and avoidance of costly coordination. However, the market process does not necessarily lead to compatible standards, especially when there is no clear market dominator. The market may pick up a wrong or technically inferior standard. In addition, if the market produced standard is a proprietary design of a particular firm, the firm may assert some monopolistic practices through the holding of patents and other Intellectual Property Rights (IPR), which puts other firms at disadvantage and results in efficiency losses to society.