EU may quiz Apple, Microsoft vs. Motorola in antitrust dispute

Summary:Europe could step in to solve more patent disputes, as Microsoft and Apple respectively gang up against Motorola over claims its licensing of patents is unfair.

The big wigs of the technology could be in for a rocky battle with European antitrust authorities, as it mulls a possible investigation to resolve the patent dispute between Apple and Microsoft against Motorola Mobility.

To date, both Microsoft and Apple have come close to ceding their respective fights with Motorola over patents, and asked Europe to step in to resolve the matter.

But with that resolution could come hefty fines, which could result in Google ultimately picking up the bill.

So far --- for a much-needed recap:

In February, Microsoft presented a case to the European Commission claiming Motorola Mobility was charging too much for the patents used in its products, calling it unfair and anti-competitive.

Apple had also complained to the Commission about Motorola's patents, discovered in a recent filing by to the U.S. Securities and Exchange Commission, saying that Motorola had gone back on a promise to license patents critical to the industry on a "fair and reasonable" (FRAND) terms.

Google, which is about to close the deal on a $12.5 billion purchase of Motorola Mobility, said as part of the European regulator investigation into the merger that it will license these patents on these FRAND terms once the deal closes.

However, until that happens, Google can't control what Motorola does, and until it inherits the company, Google's hands are clean of any impropriety.

In the meantime, the Commission opened an antitrust investigation into Samsung to discover whether it "abusively" distorted or hampered competition in Europe over licensing of these critical industry-standard patents.

Keeping up?

Because of all this, the EU Competition Commission Joaquin Almunia said he will "consider" whether these companies are breaching European antitrust law, which could lead to a fine up to 10 percent of a company's global annual turnover.

In other words, if Europe sides with Microsoft and Apple respectively or collectively, Motorola could be fined possibly into the tens of billions of U.S. dollars.

"I am considering whether we need to investigate these complaints formally to help bring more clarity into this area of competition control," Almunia said in Washington. "The holders of standard-essential patents have considerable market power. This market power can be used to harm competition," reports Reuters.

But the complex three-way dispute doesn't stop there.

Microsoft and Motorola are engaged in a heavy patent suit in Germany, now the main battleground for patent wars in the world, with dozens of cases being fought since Apple --- arguably --- kicked things off in April 2011 with its suit against Samsung.

The Windows and Office maker is even relocating its German base to the Netherlands in a bid to get out of the patent crossfire, in which 100 jobs could be affected. A Deutsche Presse Agentur [German] report stated that legal concerns are the only reason for the move.

FOSS Patents author Florian Mueller wraps it up:

"I regret to say that certain developments in patent enforcement have really turned Germany into a dangerous location for business, a problem that other high-tech companies, such as Apple, are also experiencing.

Standard-essential patents are lethal weapons, a fact that Motorola proudly highlighted to the Mannheim court by saying that such patents are like bullets in a gun: "it takes only one bullet to kill". Once a patented invention becomes a mandatory part of a standard, the patent can no longer be engineered around. A country in which such patents can be easily abused to win injunctions is not an advisable place for a European distribution operation."

He makes a very valid point.

Image credit: Alberto Novi, ALDE/Flickr.

Related:

Topics: Patents, Apple, EU, Google, Legal, Microsoft, Mobility, Samsung, Security

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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