Balancing Between ‘De Facto’ and ‘De Jure’ in Standard-setting Strategy by a Latecomer Country: The Case of ICT Industry in China

Abstract

The main objective of this study is to gain insights into the complexities of the standard-setting process involving a latecomer country. Standards are identified into two categories: market (de facto) standards arising from market interactions and formal standards (de jure) arising from mandatory specifications by public authorities. The study focused on two research questions: (i) What are the different factors that influence the outcome (success or failure) of a proposed standard by a latecomer country? (ii) How does a latecomer country navigate between de facto standard and de jure standard? It analysed two cases (WAPI - a failure and TD-SCDMA - a success) to examine the extent of government support for a standard setting that needs to balance between the de facto standard and de jure standard. The study found that standard competition is a complicated interplay between technology, markets, politics and institutions. The experience of two cases suggest that a proposed standard should judiciously combine partly a ‘de jure standard’ which aims to protect national interests and achieve a national goal, and partly the ‘de facto standard’ to meet the technology trend, market demand, as well as the end users’ welfare.

Keywords: Standardization, Latecomer country, Latecomer catch-up, De Facto standards, De June standards, ICT Industry