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 which is commonly coordinated by an entity that can exercise pervasive control over the components and their interactions. This type of extensive control can manifest itself as potentially anticompetitive practices, like tying, refusal to deal and full line forcing, causing the reaction of competition authorities. However, at the same time, systemic efficiencies can have significant benefits that cannot be generated by smaller scale, simpler, more isolated efficiencies, and are therefore of great interest to society, and of high redeeming value as antitrust defence to the introducing entities. To demonstrate how systemic efficiencies and their benefits materialize in practice this article also discusses two series of cases: the recent IBM mainframes cases in the US and the US, and the ongoing Google Android cases in the US and the EU. Both cases belong in the ICT industry, which is frequently said to consist of paradigmatic examples of large complex systems that can give rise to systemic efficiencies.