Samsung faces antitrust investigation in Europe over use of mobile patents

The European Commission announced on Tuesday that it has opened a formal investigation into Samsung’s competitive practices. The Commission will assess whether the Korean manufacturer “used certain of its standard essential patent rights to distort competition in European mobile device markets, in breach of EU antitrust rules.” Samsung has used a collection of its patents to launch a series of lawsuits against rival companies, such as Apple. The technology giant maintains, however, that these patents are essential to implementing European mobile telephony standards. Samsung may now be in violation of a promise it made in 1998, when the company gave its “irrevocable commitment to the European Telecommunications Standards Institute (ETSI) to license any standard essential patents relating to European mobile telephony standards on fair, reasonable and non-discriminatory (FRAND) terms.” Read on for the Commission’s full press release.

Antitrust: Commission opens proceedings against Samsung

Brussels, 31 January 2012 – The European Commission has opened a formal investigation to assess whether Samsung Electronics has abusively, and in contravention of a commitment it gave to the European Telecommunications Standards Institute (ETSI), used certain of its standard essential patent rights to distort competition in European mobile device markets, in breach of EU antitrust rules. The opening of proceedings means that the Commission will examine the case as a matter of priority. It does not prejudge the outcome of the investigation.

In 2011, Samsung sought injunctive relief in various Member States’ courts against competing mobile device makers based on alleged infringements of certain of its patent rights which it has declared essential to implement European mobile telephony standards. The Commission will investigate, in particular, whether in doing so Samsung has failed to honour its irrevocable commitment given in 1998 to the European Telecommunications Standards Institute (ETSI) to license any standard essential patents relating to European mobile telephony standards on fair, reasonable and non-discriminatory (FRAND) terms. The Commission will examine whether such behaviour amounts to an abuse of a dominant position prohibited by Article 102 of the Treaty on the Functioning of the EU (TFEU).

In line with the Commission’s Guidelines on standardisation agreements (see IP/10/1702 and MEMO/10/676), standard setting organisations, including ETSI, require the owners of patents that are essential for the implementation of a standard to commit to license these patents on FRAND terms. This commitment serves to ensure effective access to the standardised technology. Such commitments were given to ETSI by many patent holders, including Samsung, when the third generation (“3G”) mobile and wireless telecommunications system standards were adopted in Europe.

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 concerned undertakings.

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