Standard Setting in a Network Economy

David A Balto, Assistant Director, Office of Policy and Evaluation, Bureau of Competition, Federal Trade Commission

1/01/2005
(Original Publish Date: 2/17/2000)

Thank you for inviting me to speak on the important topic of standard setting and networks today. Standards are important because they are ubiquitous. Ever since the advent of the Industrial Revolution, when many family units ceased to be economically self-sufficient, standards have been necessary for a monetized economy to function. Standards provide the information to producers and consumers to enable them to judge the quality of products produced by others, and also to determine the safety of those products. In addition, standards perform another important function-they ensure the compatibility between complementary products and even between the various parts of a particular product. In short, standards determine how things work. When considered at this most basic level, it is clear that all commercial economic activity depends on the standards embedded in the products and services sold in that economy.