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EC Informs Motorola Mobility of Suspicion Of Antitrust Law Infringement

Thursday, May 9, 2013
BRUSSELS--The European Commission has preliminarily reached the conclusion that Motorola Mobility broke European Union antitrust law by using mobile phone patents to block products from Apple in Germany, the commission said May 6.

Motorola Mobility, a subsidiary of Google, enforced a court injunction against Apple despite earlier promises to let other companies have access to its GPRS patent.

“The protection of intellectual property is a cornerstone of innovation and growth. But so is competition,” EU Competition Commissioner Joaquin Almunia said in a statement. “I think that companies should spend their time innovating and competing on the merits of the products they offer--not misusing their intellectual property rights to hold up competitors to the detriment of innovation and consumer choice,” he continued.


Commission Sent Statement of Objections to Motorola
The commission, the antitrust watchdog of the EU, has taken the formal step of sending a Statement of Objections to Motorola Mobility, informing the company of its suspicion of infringement.

The commission admitted that the use of injunctions may be permissible against patent infringements, but said that such use would abuse the dominant market position of a company if it were used for standard-essential patents.

When the key mobile telephony standard GPRS, which is part of the GSM standard, was mandated by the European Telecommunications Standardization Institute, Motorola committed to licensing the patent on so-called FRAND (Fair, Reasonable, and Non-Discriminatory) terms, and Apple declared itself willing to abide by the FRAND conditions.

“The Commission is concerned that the threat of injunctions can distort licensing negotiations and lead to licensing terms that the licensee of the SEP would not have accepted absent this threat. This would lead to less consumer choice,” the commission said in a statement.

The commission underlined that in cases of an unwilling licensee, the use of injunctions for SEP holders could be fully justified.


Fines Against Motorola 'Possible,' Later
At a news briefing, the commission's temporary competition spokesman Jonathan Todd said that most of the anti-competitive behavior took place before Google took over Motorola Mobility. While emphasizing that possible fines were still far down the road, the spokesman clarified that any fines would be levied against the subsidiary, Motorola Mobility, and not against Google.

If the commission's final decision confirms its preliminary view, Motorola Mobility may face fines up to 10 percent of the company's global annual turnover.

Todd also clarified that a similar case, following a complaint by Microsoft against Motorola Mobility, was still “under active consideration” by the commission.

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