The relationship between patent and competition is rather complex. Whereas both sets of rules contribute to the same objective, i.e. consumer welfare and economic growth, their means collide. Patent laws create and protect monopolies while competition laws seek to limit their influence or even oppose their occurrence. However, since technological development is a financially risky process, it needs to be secured through a strong rewarding monopoly. Neo-classical theory has been so far the cornerstone of competition law. It is driven by a view of the market where price equilibrium and market atomicity constitute the main elements of allocative efficiency. But it promotes a rather static view of the market which neglects the fundamental aspects of technology-driven markets in the modern economy. Therefore we need to curb the role of the mainstream economic postulates by taking into account adequate theories in order to reflect modern innovation and technological diffusion onto the markets.

Airports have long been considered as an industry in which firms are able to exert significant market power. Nowadays, there is controversial discussion whether airports face a degree of competition which is sufficient to constrain potentially abusive behaviour resulting from this market power. The level of competition encountered by European airports has hence been evaluated by analysing the switching potential of both airlines and passengers between different airports, for example. The research within this thesis contributes to the field of airport competition by analysing the degree of potential competition 36 European hub airports face on their origin-destination market in their local catchments as well as on the transfer market within the period from 2000 to 2016. For this purpose, a two-step approach is applied for each market, with first analysing the degree of market concentration, using the Herfindahl Hirschman Index as a measure, for each destination offered at the hub airports and the respective development over time. In the second step, the effect of market concentration on the seat capacities at the hub airports is estimated. This analysis shows that the majority of European hub airports has a dominant position on both the origin-destination and transfer market. However, it can be observed that the level of market concentration has been decreasing over time, thus implying a higher overlap between destinations offered at hub airports and their competitive counterparts. Passengers thus have more alternatives available when travelling between two points, this increasing switching ability therefore imposes potential constraints on airport market power. In the second step of the analysis, the above approach is complemented by empirically estimating the impact of an increase in market concentration, and additional factors such as the presence of low cost carriers at competing airports, on the seat capacities offered on a particular destination. Using panel data for the considered time period, the statistically significant results show that an increase in market concentration leads to a decrease in the amount of seats as well the flight frequencies offered to a destination. These findings are coherent for both the origin-destination and transfer market. Considering the decrease in market concentration across the majority of European hub airports, it can in turn be inferred that more seats and frequencies are supplied on the respective routes, resulting in an increase in consumer welfare. This approach and the respective findings in this thesis serve as further guidance to policy makers deciding on the extent of economic regulation feasible for individual hub airports in Europe. From an airport and airline standpoint these results can, of course, also be applied to gain insight as to which airports are their main competitors, and which routes face a high overlap with other airports and airlines, thus designing their network structure accordingly.

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Pas de résumé / Doctorat en droit / info:eu-repo/semantics/nonPublished