Joff Wild

Microsoft has today announced that it has "filed a formal competition law complaint" against Motorola Mobility and Google with the European Commission. In a piece entitled "Google: Please Don’t Kill Video on the Web", posted on the Microsoft on the Issues blog, Dave Heiner, of the company's standards and antitrust groups, writes: "We have taken this step because Motorola is attempting to block sales of Windows PCs, our Xbox game console and other products. Their offense? These products enable people to view videos on the Web and to connect wirelessly to the Internet using industry standards." He continues: "Motorola has broken its promise. Motorola is on a path to use standard essential patents to kill video on the Web, and Google as its new owner doesn’t seem to be willing to change course." Gutierrez goes on to state:

In legal proceedings on both sides of the Atlantic, Motorola is demanding that Microsoft take its products off the market, or else remove their standards-based ability to play video and connect wirelessly. The only basis for these actions is that these products implement industry standards, on which Motorola claims patents. Yet when the industry adopted these standards, we all were counting on Motorola and every contributor to live up to their promises. Watching video on the Web is one of the primary uses of computers these days. And we’ve all grown accustomed to “anytime, anywhere” access to the Internet, often made possible by the Wi-Fi standard. Imagine what a step back it would be if we could no longer watch videos on our computing devices or connect via Wi-Fi, or if only some products, but not others, had these capabilities. That would defeat the whole purpose of an industry standard. 

The Microsoft move comes less than a week after it was revealed that Apple has filed a competition complaint against Moto "regarding the enforcement of MMI's standards-essential patents against Apple allegedly in breach of MMI's FRAND commitments". Also last week, Google received European clearance to purchase Motorola Mobility, while also being handed a warning from competition commissioner Joaquín Almunia that "the Commission will continue to keep a close eye on the behaviour of all market players in the sector, particularly the increasingly strategic use of patents".Previously Almunia has stated:

Contestable markets, instead, allow new players to experiment, and new ideas to succeed. It is a major task of competition control to ensure that new generations of businesses are given a fair chance.

I am notably thinking of the surge in the strategic use of patents that confer market power to their holders.

The potential abuses around standard-essential patents are a specific illustration of this concern.

Standards are the best tool to promote interoperability of devices or to define safety or quality benchmarks. In the communications technologies, standards are key for a universal interconnection and seamless communication.

Once a standard is adopted, it becomes the norm and the underlying patents are indispensable.

Owners of such standard essential patents are conferred a power on the market that they cannot be allowed to misuse.

Standardisation processes must be fair and transparent, so that they are not in the hands of established firms willing to impose their technologies. But it is not enough. We must also ensure that, once they hold standard essential patents, companies give effective access on fair, reasonable and non discriminatory terms.

This is crucial if we want industries and businesses relying on such patents to develop freely to their utmost potential.

I am determined to use antitrust enforcement to prevent the misuse of patent rights to the detriment of a vigorous and accessible market. I have initiated investigations on this issue in several sectors and we will see the results in due time. 

Given all that, as well as the investigation of Samsung that it is already conducting, I don't think there is any doubt that the Commission will open a formal investigation of Motorola Mobility. Although i would not want to prejudge anything (and, of course, I am no lawyer), in the past the Competition DG has shown itself to be highly dubious of patents and very willing to impose penalties on patent owners which it feels are using their rights in ways that oversteps the mark - just ask Microsoft. I also have a sneaky feeling that while Samsung, Motorola and Google are currently in the firing line, others operating in the smartphone sector, perhaps even Microsoft and Apple themselves, will also end up there too at some stage; and that once the Commission has finished with things the sector will look very different to how it does now. As the FT so eloquently put it a few years back, to all intents and purposes the Commission is now " regulator-in-chief of the global technology industry"; whether the industry likes it or not!

A while ago IAM magazine ran an article by Natasha Kirk and Stephen Whitfield, of law firm Taylor Wessing, which began: "The smartphone IP wars have captured many newspaper  headlines. If the companies  involved are not careful, they may  also soon attract the attention of  European competition authorities." Well guess what ...