How to Address “Hold Up” in Standard Setting Without Deterring Innovation:Harness Innovation by SDOs

David L.. Meyer, Deputy Assistant Attorney General, Department of Justice

9/19/2008
(Original Publish Date: 3/26/2008)

In the past, the options available to SDOs to deal with the issue of hold up were unnecessarily constrained by fears of antitrust liability. As the tools available to SDOs expand, thanks to a more rational antitrust approach, it remains important for antitrust law and policy not to take back that flexibility by imposing liability every time the mechanism chosen by the SDO fails to avoid hold up, and a decision maker (judge, jury or Commission) believes the resulting price charged was excessive. Instead, antitrust should focus on the propriety of the SDO process itself, and with respect to claims that misbehavior led to hold up and "monopolistically" high prices, impose liability only where competition has been harmed.