Manipulating Interface Standards as an Anti-Competitive Strategy

Abstract

The creation of interface standards enables competition at the level of components, rather than competition in complete systems. Consumers often benefit from component competition. However, the standard-setting process might be manipulated to achieve anticompetitive ends. We consider the conditions under which a standards consortium could impose anticompetitive burdens on the market, and several strategies such a consortium might employ to achieve anti-competitive objectives. We present a new strategy -- one-way standards -- and discuss the conditions under which it can be anticompetitive.