Intellectual property rights and market definitions under scrutiny—is the commission’s new Notice innovative enough?

Abstract This article analyses the 2024 Commission Notice on the Relevant Market Definition and recent case law to review the European Commission’s approach to identifying the relevant market when intellectual property (IP) rights and innovation are present. The analysis is undertaken with reference to the 2014 Transfer Technology Block Exemption Regulation, the new R&D Block Exemption Regulation, the 2017 US IP Licensing Guidelines, and the new 2023 US Merger Guidelines. It identifies that the Commission has not ensured alignment between its regulations and guidelines, instead playing hopscotch with legal certainty. In terms of the broader contribution, this article reflects on the development of the interface between competition law and IP rights and the central part innovation now plays in European Union competition law enforcement. It marks a positive move away from Schumpeterian theories of innovation needing monopoly power towards Arrow’s idea that competition can be a key influencer of innovation. This shift in attitude comes alongside the recent regime change in US antitrust enforcement and the Commission’s own adoption of the Digtial Markets Act and Digital Service Act to regulate the digital economy. However, for IP rights, the ex-ante approach and reliance on ‘innovation spaces’ in defining the relevant market risks overstepping the competition law’s role as second-tier regulator of IP rights.