Samsung's Requests to Ban Apple Products Anti-Competitive: EC
Samsung abused its dominant position in the mobile-device space when company officials asked several European countries to bar Apple from using Samsung-owned wireless patents crucial to the manufacturing and use of smartphones, according to European antitrust regulators.
The European Commission (EC) issued a "Statement of Objections" Dec. 21 that outlined the reasons regulators believe Samsung violated European antitrust laws by asking countries such as Germany, Italy and France to ban Apple devices that use technology based on the particular patents.
Officials with Samsung, which is in ferocious legal disputes with Apple in several countries over patents, had said earlier this week that they were withdrawing their injunction requests to keep Apple devices from store shelves, but the EC—the European Union's antitrust arm—issued its preliminary view anyway, saying that such requests related to such mobile phone standard-essential patents (SEPs) constituted abuse.
"Intellectual-property rights are an important cornerstone of the single market," Joaquin Almunia, the EC's vice president of competition policy, said in a statement. "However, such rights should not be misused when they are essential to implement industry standards, which bring huge benefits to businesses and consumers alike. When companies have contributed their patents to an industry standard and have made a commitment to license the patents in return for fair remuneration, then the use of injunctions against willing licensees can be anti-competitive."
Samsung and Apple have been battling in courtrooms across the globe over patent rights as both companies look to gain share in the ultra-competitive worldwide smartphone market. Some of the filings Samsung has made against Apple center around 3G wireless patents, in particular the 3G UMTS standard common in Europe. The standard is important for mobile and wireless communications, according to EC officials, and when it was adopted on the continent, Samsung agreed to license its patents that were crucial to the 3G Universal Mobile Telecommunications System (UMTS) standard on what regulators called Fair, Reasonable and Non-Discriminatory (FRAND) terms.
Samsung in 2011, as its competition with Apple really began to ramp up, started to request injunctions from some European countries looking to bar Apple devices that use these 3G UMTS patents from being sold in those countries. EC regulators in their statement said Apple "has shown itself to be willing to negotiate a FRAND license for the SEPs," and because of that, Samsung's request for injunctions "harms competition."
According to European regulators, a Statement of Objections is a formal step in which the EC lets the parties know in writing of the commission's concerns, and those parties can then reply in writing and request a hearing. Commissioners then make their final decision.
In an emailed statement to Bloomberg, Samsung officials said they are "studying the statement and will firmly defend ourselves against any misconceived allegations."
"We will continue to fully cooperate with the commission," the officials said, adding that they are "confident that in due course the commission will conclude that we have acted in compliance with European Union competition laws."
Samsung had filed injunction requests to block Apple products in Germany, France, Italy, the U.K. and the Netherlands.
Samsung and Apple have been accusing each other of infringing on patents and have been trying to keep their rivals' products banned in various countries. Apple officials had hoped to have some Samsung products banned in the United States, but a Dec. 17 ruling by U.S. District Court Judge Lucy Koh makes it unlikely that such a ban will happen.
In a trial in August in Koh's court, a jury found that Samsung had willfully infringed on Apple patents, and had ordered Samsung to pay Apple $1.05 billion in damages. However, in her ruling Dec. 17, Koh, implying that Apple's claim of harm from Samsung's behavior, suggested that the damage award was too high.