This chapter examines the competition law approach to the strategies employed by producers in the high technology industries to capture the benefits of innovation. It considers first the developments in the content and style of competition policies in the major producer economies of the United States, Europe and Japan. In the light of these developments, it then evaluates the provisions and administration of the Australian trade practices scheme.

In the examination of competition law, we remain with the liberal legal framework for innovation strategies to be pursued in the market and private organizations. Competition law is quintessentially the layer of rule-based regulation applied by the state to the exercise of intellectual property and other kinds of market powers, not to supplant the workings of the market but to make it work better, to live up to its competitive promise. With the scaling down of direct substantive regulation, at least in some sectors, competition law becomes all the more important as a possible counterweight to the private rights which the state also supports. The Chairman of the Australian Trade Practices Commission recently emphasized this point (Commonwealth of Australia. CCH, 1991). Moreover, in the Commonwealth Government's major industry statement of 12 March 1991, ‘building a competitive Australia’, the Prime Minister stated: ‘The Trade Practices Act is our principal legislative weapon to ensure consumers get the best deal from competition’ (Commonwealth of Australia. House of Representatives, 1991: 1766).