The University of Chicago Business Law Review
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143
Abstract
This Article examines how monopoly power warps incentives to innovate within the largest tech companies across history. Technology monopolies face competing incentives: to innovate and to maintain the status quo. As the center of their market, monopolists have resources and capacity to generate tremendous disruptive innovation. However, disruptive innovation serves only to threaten to destabilize the profitable market structure that a monopolist sits atop. We find that technology monopolists do not fail to innovate, but that they instead restrict that innovation from being released to the market or release the innovation in a diminished way, yoked to the existing technology over which they have monopoly power. We refer to this pattern as “Captured Innovation.” We examine Captured Innovation, and the actions that can break the dam on technology development that it represents, in three case studies of the development of general-purpose technologies at IBM, AT&T, and Google. We find that in these cases where Captured Innovation has taken hold, competition enforcement actions or competition itself can unleash a wave of innovative development.
Recommended Citation
Showalter, Reed and Edelson, Laura
(2025)
"Captured Innovation: Technology Monopoly Response to Transformational Development,"
The University of Chicago Business Law Review: Vol. 4:
No.
1, Article 4.
Available at:
https://chicagounbound.uchicago.edu/ucblr/vol4/iss1/4
