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Tuesday, April 03, 2012
European Commission Probes Motorola After Microsoft, Apple Complaints

The European Commission (EC) has opened two formal antitrust investigations against Motorola Mobility Inc., investigating whether the phone maker breached antitrust rules by allegedly over-charging Microsoft and Apple for use of its patents in their products.

The EC will assess whether Motorola has abusively, and in contravention of commitments it gave to standard setting organisations, used certain of its standard essential patents to distort competition in the Internal Market in breach of EU antitrust rules.

Following complaints by Apple and Microsoft, the Commission will investigate whether by seeking and enforcing injunctions against Apple's and Microsoft's flagship products such as iPhone, iPad, Windows and Xbox on the basis of patents it had declared essential to produce standard-compliant products, Motorola "has failed to honour its irrevocable commitments made to standard setting organisations." In these commitments, Motorola engaged to license those standard-essential patents on fair, reasonable and non-discriminatory (FRAND) terms.

In addition, the Commission will also assess the allegation by both Apple and Microsoft that Motorola offered unfair licensing conditions for its standard-essential patents.

In line with the Commission's guidelines on horizontal cooperation agreements, standard setting organisations require the owners of patents that are essential for the implementation of a standard to commit to license these patents on fair reasonable and non-discriminatory ("FRAND") terms. This commitment serves to ensure effective access to standardised technology.

Motorola gave such FRAND commitments to the relevant standard setting organisations, when the second and third generation ("2G" and "3G") mobile and wireless telecommunications system standards, the H.264 video compression standard and the standards for wireless local area network (WLAN) technologies were adopted.

In order to guarantee undistorted competition and to reap the positive economic effects of standardisation it is important that FRAND commitments be fully honoured by the companies concerned.

On 30 January 2012, the EC has opened proceedings against Samsung in order to investigate whether Samsung has failed to honour a FRAND commitment in licensing negotiations, including by seeking injunctive relief before the courts of certain Member States in relation to standard essential patents.

On 13 February 2012, the Commission approved the acquisition of Motorola Mobility by Google, without prejudice to potential antitrust concerns related to the use of standard essential patents.

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