An Economic Basis for Open Standards

The paper provides an overview of standards and standard-setting processes. It describes the economic effect of technology standards - de facto as well as de jure - and differentiates between the impact on competition and welfare that various levels of standards have. It argues that most of what is claimed for "open standards" in recent policy debates was already well encompassed by the term "standards"; but also that properly defined open standards can have the particular economic effect of allowing "natural" monopolies to form in a given technology, while ensuring full competition among suppliers of that technology. The paper explains why open standards must allow all possible competitors to operate on a basis of equal access to the ability to implement the standard and why this means that the economic effect of open standards may require different conditions for different markets. A case is made for public procurement to support open standards and finally some guidelines are provided for effective policy in relation to open standards and interoperability.

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Published:2005
Classification:Publications with Economic / Trade Focus
AuthorsRishab Ghosh (University of Maastricht, Netherlands)
Other bibliographical information:Report from the FLOSSPOLS (Free/Libre/Open Source Software: Policy Support) project, funded under the Sixth Framework Programme of the European Union, managed by the eGovernment Unit of the European Commission's DG Information Society.