Binding Prometheus: Regulating Refusals to License Digital Copyright Content Under the Singapore Competition Act 2004

Competition rules regulating access to digital copyright content in the US and EU have largely been misdirected or incomplete. This has resulted in complex, sometimes conflicting, rules governing refusals to license, and may stem from insufficient appreciation of the fundamental legal and economic issues involved. In a world where intellectual property serves as one of the sources of greatest value, a finely tuned competition policy is more important than ever before. This paper therefore aims to formulate salient guidelines for applying the Singapore Competition Act 2004 to digital markets. Copyright as it presently exists in the digital realm has distorted the utilitarian balance. Overbroad copyright risks retarding innovation, particularly in digital markets where innovation is interdependent on interoperability and access to copyright content. No measure at present seems capable of addressing anticompetitive abuses by copyright owners endogenously within the copyright regime. This may have caused copyright abuses to fall within the purview of competition law.Section 47 of the Competition Act prohibits the dominant copyright owner from abusing its rights. However, 'dominance' and 'abuse' are arbitrary concepts that have been made more uncertain by broad textured legislation. The flexibility offered to those interpreting key terms that determine liability has sometimes caused a divergence in approaches based on the particular economic goals and legal analytical framework chosen.From a legal perspective, the law sometimes fails to appreciate the nature of the grant under copyright law and tend to over or under-compensate the owner at the expense of encouraging further creative works. Analogies to real property rights are inappropriate. Digital copyright is susceptible to free riding, and owners should be more justified in refusing access. The extent of this justification turns on the scope of the copyright grant. By explicitly taking into account the owner's statutory rights, analysis will be more principled and conceptually certain.Analysis should also include an express weighing of the socio-economic costs and benefits in the refusal in order for proper calibration of copyright immutability. From an economic perspective, the law sometimes gives insufficient attention to gains from dynamic efficiency. Concerns about preserving SMEs reflect pious socio-political aspirations based on inconclusive evidence, rather than more readily identifiable economic targets. Similarly, focusing on price and output gains of static efficiency neglects the greater benefits which technological progress brings. Any failure of market discipline on prices and output is only temporary. Even on a long-run view of markets that acknowledges the need for appropriation by IP owners and continual control over access to their content is taken, the law may still fail to appreciate the economics of network effects.Ultimately, rivals should be encouraged to independently innovate and develop new and better copyright content where possible, rather than relying on compulsory access as a crutch to compete. How the law develops in Singapore will have a substantial bearing on her national economy. Countries with legal systems able to deliver quick, sound and binding answers to tough questions like these will take the baton.