On October 1, 2015 Judge Douglas H. Ginsburg offered some thoughts on high-tech and digital markets in the context of antitrust and patent law, both of which are still working to catch up with the emergence and rapid evolution of those markets. Judge Ginsburg started by pointing out that even before the Microsoft case, public fi gures were already talking about whether and how to adapt antitrust law to high-tech fi elds. He explained that: “Competition for the field and successive monopolies may be a benign new normal in a non-trivial segment of the digital marketplace. That is, to borrow a very old idea, so long as there is competition for the fi eld, even if there is little or no competition within the field, competitive conditions will prevail.” He then opened up the debate arguing the following three points.
WHAT MAKES HIGH-TECH MARETS DIFFERENT?
Ginsburg explained that high tech markets are characterized and defined by continuous innovation. Innovation is both driven by and the driver of competition. That is, there is more intense competition for gains in dynamic efficiency than is seen in the old economy. While static efficiency entails the most productive use of resources at a particular moment, dynamic efficiency entails the investment of resources to develop better technologies and maximize productivity over time. Judge Ginsburg concluded that we should aim to have dynamic efficiency, since “gains in wealth are mostly due to innovation—not marginally improving the efficiency of what already exists.” (Robert Solow, Nobel, 1987)