Motorola hit by two EU antitrust probes over patents

Following complaints by Apple and Microsoft, the European Commission has launched twin investigations into Motorola's alleged failure to honour its FRAND patent commitments

Europe's antitrust authorities have opened two investigations into possible patent misuse by Motorola, following complaints lodged by Apple and Microsoft.

European Commission

The European Commission has launched twin investigations into Motorola's alleged failure to honour its FRAND patent commitments, after complaints from Microsoft and Apple.

The first probe covers Motorola's alleged failure to honour its promise to license certain patents on fair, reasonable and non-discriminatory (FRAND) terms, while the second "will examine whether Motorola's behaviour amounts to an abuse of a dominant market position", the European Commission said in a statement on Tuesday.

Apple and Microsoft both complained to European regulators in February that Motorola was breaching its FRAND obligations. The authorities said they will now look into the charges, which centre on article 102 of the EU's competition rules, "as a matter of priority".

"The Commission 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," the Commission said.

Google got clearance from the EU for its upcoming takeover of Motorola in February, just before its mobile device rivals raised their allegations. On Tuesday, the Commission noted that this approval was granted "without prejudice" to potential antitrust concerns about Motorola's use of its standards-essential patents. Similarly, the outcome of the antitrust probes cannot overturn that approval, which was "final", a Commission spokeswoman told ZDNet UK.

The EU's competition authorities are already investigating Samsung over similar allegations around its use of FRAND patents. "Although the Samsung investigation concerns similar issues, there is no plan to merge the two," the Commission's spokeswoman confirmed.

FRAND patents are those seen as essential to certain technologies and, to ensure that multiple companies get to use these patents without having to pay an excessive amount to do so, the owners of the patents are obliged to let rivals license them on fair terms.

Apple's lawsuits

Apple has been highly litigious in the past year or two, suing companies such as Samsung and Motorola over the alleged unauthorised use of its patents in their Android phones and tablets. However, none the patents involved in these suits have been standards-essential.

When Motorola struck back, it did so over standards-essential patents that covered key aspects of 2G and 3G cellular technology. In early February, Motorola used an injunction it had been granted by a German court to have certain iPad and iPhone models briefly removed from sale in that country.

Apple subsequently argued that Motorola was demanding excessive royalties — 2.25 percent of the retail price of devices that used the patents in question — and that Motorola was wrong to use standards-essential patents as a legal weapon at all.

Microsoft's case

In Microsoft's case, the patents in question deal with the H.264 video codec.

Motorola owns around 50 patents that are used in this technology, and has sued Microsoft — again in German courts — for using the codec in Windows 7, Internet Explorer 7, Windows Media Player and the Xbox gaming console without paying Motorola the royalties it demands

As with the 2G and 3G patents in the Apple case, Motorola has accused Microsoft of refusing to pay royalties at the 2.25-percent rate.

On Monday, Microsoft said it feared an upcoming verdict in that case will go in Motorola's favour. In particular, it is concerned that a resulting injunction would force it to stop distributing or marketing Windows 7 and the Xbox in Germany. Because of this, Microsoft said it has been forced to move its European distribution centre from that country to the Netherlands, where courts are less likely to ban products over the alleged infringement of standards-essential patents.

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