Europe’s Antitrust Chief Censures Google’s Motorola Mobility
By JAMES KANTERAPRIL 29, 2014
BRUSSELS — Europe’s antitrust chief said Tuesday that Motorola Mobility had broken European Union law by competing unfairly in technology markets, but he did not issue a fine against the company, which is owned by Google.
The decision by Joaquín Almunia, the European Union competition commissioner, was the latest turn in the so-called patent wars involving technology titans like Apple, Google, Microsoft and Samsung.
The decision on Tuesday requires Motorola to strike out clauses in an existing agreement with Apple that prohibits Apple from challenging the validity of patents held by Motorola. Those patents are used by Apple and other technology companies to make compatible products and help devices like iPhones and iPads communicate.
The battle is driven by ferocious competition on the market for consumer mobile technologies, like smartphones and tablets, which share many so-called essential technologies.
The case against Motorola was focused on the way the company sought and then enforced a court injunction against Apple in Germany that Mr. Almunia’s office concluded was aimed at blocking Apple’s access to the market. Those legal tactics constituted an abuse of a dominant position, according to the European Commission.
“The so-called smartphone patent wars should not occur at the expense of consumers,” Mr. Almunia said in a statement. “This is why all industry players must comply with the competition rules.”
The commission signaled in February that Motorola might face such an order. The previous month, Google had said it would sell Motorola to Lenovo less than two years after paying $12.5 billion to buy it, but would still keep a valuable portfolio of patents.
Despite the lack of a fine, the ruling by Mr. Almunia should give valuable guidance to the technology industry, according to Michael A. Carrier, a professor at Rutgers Law School.
The “decision confirms that patent holders cannot obtain injunctions against willing licensees,” Mr. Carrier said. “But the complexity of the issue likely convinced the E.C. not to issue a fine against Motorola,” he said, referring to the European Commission, which is the administrative arm of the European Union.
The commission has leeway to charge as much as 10 percent of a company’s most recent global annual sales for antitrust abuses. Google, as the parent company of Motorola, could have faced a large fine.
But the commission said on Tuesday there was not yet established case law enabling it to impose a fine.
Mr. Almunia began a formal investigation of Motorola in April 2012 after complaints by Apple, which was concerned about access to Motorola’s patents on vital communications technology integrated into the iPhone and iPad, and by Microsoft, which wanted to ensure access to video and wireless patents for products like the Xbox.
Representatives from Google and Motorola contacted by email on Tuesday morning had no immediate comment.
The patents case is one of a number of antitrust actions that Google has been juggling in Europe.
Google has already agreed to settle a separate antitrust investigation into the way the company runs its online search and advertising business, although that deal still needs to be formally completed.
In yet another case, Mr. Almunia is still looking at Google’s Android smartphone software, which the company has used to move into a leading position among mobile phone operating systems.
Google made its acquisition of Motorola Mobility mostly to take advantage of patents, including many related to wireless devices, to bolster its Android operating system. When Mr. Almunia gave European regulatory approval for the deal in early 2012, he warned that he would not exonerate any past wrongdoing by Motorola.
Senior regulators across the world have grown increasingly concerned that it has become too easy for companies to win injunctions in national courts that could force manufacturers to withdraw popular products from the market.
Mr. Almunia said he regarded some attempts by companies like Motorola to assert their claims to patents as valid. But he warned that holders of certain so-called standard-essential patents who had already consented to license them had to meet certain standards before resorting to court action.
“While patent holders should be fairly remunerated for the use of their intellectual property, implementers of such standards should also get access to standardized technology on fair, reasonable and nondiscriminatory terms,” Mr. Almunia said. “It is by preserving this balance that consumers will continue to have access to a wide choice of interoperable products,” he said.
In a separate decision, Mr. Almunia approved a settlement with Samsung in a similar case after the South Korean company agreed not to take rivals to court over patent disputes concerning patents and tablets.
In that case, Apple had complained about Samsung’s use of designs and packaging from the iPhone and iPad, while Samsung had accused Apple of infringing upon its wireless telecommunications patents.
“I welcome Samsung’s commitment to resolve disputes on standard essential patents without having recourse to injunctions in a way that could harm competition,” Mr. Almunia said.