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Apple Suits Prompt EU to Probe Samsung for Patent Abuse

 & Chloe Albanesius Executive Editor, News

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The European Commission on Tuesday opened a formal investigation into whether Samsung has used its patents to "distort competition" in the European mobile market.

At issue is Samsung's attempt to have Apple products banned in various EU members states for patent infringement - from Italy and France to Germany and the Netherlands - though those efforts have not been very successful.

"The Commission will investigate, in particular, whether in doing so Samsung has failed to honour its irrevocable commitment given in 1998 to the European Telecommunications Standards Institute (ETSI) to license any standard essential patents relating to European mobile telephony standards on fair, reasonable and non-discriminatory (FRAND) terms," the commission said in a statement. "The Commission will examine whether such behaviour amounts to an abuse of a dominant position prohibited by Article 102 of the Treaty on the Functioning of the EU (TFEU)."

EU rules require companies that hold patents essential to the implementation of a standard to license them on FRAND terms.

"Such commitments were given to ETSI by many patent holders, including Samsung, when the third generation ('3G') mobile and wireless telecommunications system standards were adopted in Europe," the EU said. "In order to guarantee undistorted competition and to reap the positive economic effects of standardisation it is important that FRAND commitments be fully honoured by the concerned undertakings."

The EU said it will review the case as a priority.

In a statement, Samsung said it "has not received any formal notice and is unable to discuss the matter at this time."

News of a possible EU investigation into Samsung first emerged in early November. At the time, officials asked Samsung and Apple to turn over data related to the enforcement of mobile-related patents.

In a Tuesday post, patent blogger Florian Mueller said "the launch of a full-blown investigation after a few months of preliminary investigations is an important step."

"This means European competition enforcers have received information, in response to questionnaires (sent to Apple, which may have informally complained, and Samsung) that warrant a more formal effort," Mueller wrote.

But why is Samsung being penalized when Apple has also filed multiple patent suits in Europe? Mueller said it comes down to the fact that Samsung is pursuing cases related to patents that are essential to wireless telecommunications standards, whereas "Apple has never sued anyone over a patent of that kind," he said. "In fact, Apple never participated in such a standard-setting process as far as I know."

In theory, Apple could be targeted, but it would not be on FRAND-related issues, Mueller said. If anything, today's investigation should be a warning to those thinking about pursuing injunctions based on FRAND-related standards patents, he wrote.

"In particular, Motorola Mobility has already won (but, to the best of my knowledge, not yet sought to enforce) an injunction against Apple in Germany," Mueller wrote. "Motorola's conduct is also relevant to the ongoing competition review of its proposed acquisition by Google. As I wrote last week, there's a risk of Google putting its muscle behind widespread FRAND abuse post-acquisition."

Update: In a statement sent Wednesday morning, Samsung said it had received notice of the inquiry, and pledged to "cooperate fully" with the commission. "Samsung is confident that its approach regarding the enforcement of its 3G standard-essential patents is consistent with all applicable antitrust principles," the company said. "We believe that, upon the scrutiny of the facts, the Commission will conclude that Samsung Electronics has acted in compliance with EU competition rules."

About Our Expert

Chloe Albanesius

Chloe Albanesius

Executive Editor, News

My Experience

I started out covering tech policy in DC for The National Journal, where my beat included state-level tech news and all the congressional hearings and FCC meetings I could handle. I later covered Wall Street trading tech before switching gears to consumer tech. I now lead PCMag's news coverage.

My Areas of Expertise

Getting my start in DC means I still have a soft spot for tech policy; Congressional hearings can sometimes be as entertaining as a Bravo reality show, for better or worse. But PCMag is all about the technology we use every day, as well as keeping an eye out for the trends that will shape the industry in the years ahead (or flop on arrival). I've covered the rise of social media, the iOS vs. Android wars, the cord-cutting revolution that's now left us with hefty streaming bills, and the effort to stuff artificial intelligence into every product you could imagine. This job has taken me to CES in Vegas (one too many times), IFA in Berlin, and MWC in Barcelona. I also drove a Tesla 1,000 miles out west as part of our Best Mobile Networks project. Of late, my focus is on our hard-working team of reporters at PCMag, guiding and editing their robust coverage.

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