scholarly journals How Antitrust Enforcement Can Spur Innovation: Bell Labs and the 1956 Consent Decree

2017 ◽  
Author(s):  
Martin Watzinger ◽  
Thomas A. Fackler ◽  
Markus Nagler ◽  
Monika Schnitzer
Keyword(s):  
Antitrust Enforcement ◽  
Consent Decree

scholarly journals How Antitrust Enforcement Can Spur Innovation: Bell Labs and the 1956 Consent Decree

2017 ◽  
Vol 2017 (1) ◽  
pp. 15898 ◽  
Author(s):  
Martin Watzinger ◽  
Thomas Fackler ◽  
Markus Nagler ◽  
Monika Schnitzer
Keyword(s):  
Antitrust Enforcement ◽  
Consent Decree

scholarly journals How Antitrust Enforcement Can Spur Innovation: Bell Labs and the 1956 Consent Decree

2020 ◽  
Vol 12 (4) ◽  
pp. 328-359
Author(s):  
Martin Watzinger ◽  
Thomas A. Fackler ◽  
Markus Nagler ◽  
Monika Schnitzer
Keyword(s):  
Control Group ◽  
Antitrust Enforcement ◽  
Consent Decree ◽  
Compulsory Licensing ◽  
Telecommunications Sector

Is compulsory licensing an effective antitrust remedy to increase innovation? To answer this question, we analyze the 1956 consent decree that settled an antitrust lawsuit against Bell, a vertically integrated monopolist charged with foreclosing the telecommunications equipment market. Bell was forced to license all its existing patents royalty-free, including those not related to telecommunications. We identify the effect of the consent decree on follow-on innovations building on Bell patents by using exactly matched non-Bell patents as control group. We show that the consent decree led to a lasting increase in innovation but only in markets outside the telecommunications sector. (JEL D45, K21, L12, L24, L63, O31, O34)

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