Motorola Faces Dual European Union Antitrust Investigations

By Michelle Maisto  |  Posted 2012-04-03 Print this article Print

Whether Motorola has been fair, reasonable and nondiscriminatory, or FRANDly, is at the core of two antitrust investigations, nudged by Apple and Microsoft complaints.

Motorola Mobility Inc. (MMI) is being taken to task by the European Union for essentially playing outside the bounds of what's considered good sportsmanship in the highly competitive mobile device arena.

The EU's European Commission announced April 3 that is has opened two formal antitrust investigations against MMI. The first will investigate whether Motorola has "abusively" used some of its essential patents to "distort competition" in the market, in breach of EU antitrust rules," it said in a statement.

The second, following complaints by Apple and Microsoft, will investigate whether, in seeking injunctions against products, such as Apple's iPad and Microsoft's Xbox, Motorola failed to honor certain "irrevocable commitments" made by "standard-setting organizations."

By such commitments, it refers to FRAND €” fair, reasonable and nondiscriminatory€”the basis on which companies are supposed to, for the mutual benefit of all, license patents to one another.

In January, the European Commission, which acts as the antitrust watchdog of the EU, also opened an investigation into Samsung, which it suspected wasn't being very frandly, as it were.

"In addition," according to the statement, "the Commission will also assess the allegation by both Apple and Microsoft that Motorola offered unfair licensing conditions for its standard-essential patents in breach of Article 102 [of the Treaty of the Functioning of the European Union (TFEU)]."

MMI is currently in the process of being acquired by Google, largely for its extensive patent portfolio, which Google needs to better cushion for the for-now rather thin portfolio behind its Android OS.

Patent expert Florian Mueller, on his Foss Patents blog, wrote that he found it particularly important that the EC announcement outlined "two legal theories of abuse, either one of which could be sufficient to find Motorola guilty..."

The first is the matter of whether by pursing injunctions against Apple and Microsoft products, Motorola failed to honor its FRAND commitments. "The truth is that the European Commission said that seeking an injunction is 'not, of itself, anti-competitive,' but that is not the same as saying that it's generally allowed," wrote Mueller.

The second is regarding Microsoft and Apple's allegations that Motorola is being unfair in its licensing conditions.

"Motorola is asking for the moon," Mueller continued, "and if such out-of-this-world royalty demands don't trigger antitrust intervention, antitrust enforcement agencies will probably never take action against those attempting to force implementers of standards into agreements on unFRANDly, anti-competitive terms."

Indeed, given the rate at which mobile device manufacturers initiate legal proceedings against each other, the FRAND concept would seem to be one that's taken extremely lightly€”a situation that Joaquin Almunia, the EC's vice president and chief antitrust enforcer, has lost patience with.

"[Some] holders of standard-essential patents can effectively hold up the entire industry with the threat of banning the products of competitors from the market," Almunia said during a recent speech in Washington, according to The Wall Street Journal.

"I don't need to tell you that this is unacceptable, and I am determined to use antitrust enforcement to prevent such holdup by patent holders."

Motorola, for its part, believes it has followed the letter of the law.

"MMI is confident that a thorough investigation will demonstrate that it has honored its FRAND obligations and complied with antitrust laws," MMI spokesperson Christa Smith told eWEEK. "MMI will continue to work closely with the European Commission to resolve this matter as soon as practicable."


Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.

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