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Europe’s patent-sceptic competition DG is a powerful weapon to call on

This week, the Association for Competitive Technology (ACT) welcomed the news that the European Union’s competition commissioner had written to Google to outline his concerns that the company’s internet search business may be adversely affecting competition.

Though it describes itself as an ‘international grassroots advocacy organisation’ for small IT businesses, ACT also counts big name players including Microsoft, Oracle and Intel among its sponsors. There is no doubt that Microsoft itself is pleased with Commissioner Almunia’s note. The company’s differences with Google are well documented – and it looks like Europe’s antitrust landscape may be emerging as a new front in their ongoing clashes.

In addition to this latest probe, Google’s new acquisition, Motorola Mobility, is the subject of a continuing formal investigation from the European Commission’s Directorate General for Competition. Along with Samsung, Moto is being investigated for alleged abuse of its standards-essential patents. This inquiry was started after the DG received complaints from Microsoft and Apple (itself hardly Google’s biggest fan) that licences were not being offered at a reasonable price.

All in all, Google is finding itself under intense and mounting scrutiny. By tapping into the zeal of antitrust watchdogs, Microsoft may have found another pressure point on one of its key competitors. Google, of course, got into patents rather late in the game; perhaps the same thing is also true of antitrust and competition law. If so, you can expect Microsoft, and others, to hone in on that weakness relentlessly.

Way back in 2007, the Financial Times described the EU’s competition DG as the “regulator-in-chief of the global technology industry” and, as Microsoft knows from bitter experience, its views of patents are frequently somewhat sceptical, to put it mildly. Although there are some indications that US regulators may be taking a more aggressive line on patents than in the past, Europe is still the place to go if you really want to make life difficult for a competitor.

Companies which are the subject of an antitrust complaint in the EU face lengthy and intrusive investigations into their business practices. If these turn out badly for the target of them, the outcome of such investigations – potentially consisting of astronomical fines and forfeiture of market share – has the potential to profoundly destabilise a market position. It looks like Microsoft, Apple and Huawei – which filed an antitrust complaint against InterDigital this week – have recognised that the ability to secure such drastic consequences, as well as significant modifications to core business strategies, could give them considerable leverage against competitors. Who will be next?


Jack Ellis
IAM Magazine
25 May 2012

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Competition/antitrust, Licensing, IP litigation, Patents

Comments

RE: Europe’s patent-sceptic competition DG is a powerful weapon to call on

The EU patent related anti trust investigations are indeed very interesting, particularly with Microsoft having turned from poacher to game keeper.

Ironically, according to Marshal Phelps' book, it was pressure from anti trust regulators for Microsoft to open its software to interoperability that was on of the key drivers for Microsoft to begin amassing a large patent portfolio.

Fred Logue, Shibumi Consulting on 26 May 2012 @ 07:34

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