SYSTEMIC EFFICIENCIES IN COMPETITION LAW: EVIDENCE FROM THE ICT INDUSTRY

This article introduces the concept of systemic efficiencies, traces its theoretical underpinnings in economics, management, and technology, and applies it to recent high-profile cases. Systemic efficiencies occur in large complex systems through the interaction of multiple distributed components, a process that is commonly coordinated by an entity that can exercise pervasive control over the system's components and their interactions. That type of extensive control can manifest as potentially anticompetitive practices, such as tying, refusing to deal, and full-line forcing, which can provoke the reaction of competition authorities. However, at the same time, systemic efficiencies can have significant benefits that cannot be generated by more isolated efficiencies that are simpler and smaller in scale. Thus, systemic efficiencies are of great interest to society, and of high redeeming value as an antitrust defense mechanism for the introducing entities. This article discusses two cases to demonstrate how systemic efficiencies and their benefits materialize in practice: (1) the recent IBM mainframes cases in the United States and the European Union and (2) the ongoing Google Android cases in the United States and the European Union. Both cases belong in the ICT industry, which is paradigmatic of large complex systems that can give rise to systemic efficiencies.