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EC Begins Antitrust Probes Against Motorola Mobility - Update

EC Begins Antitrust Probes Against Motorola Mobility - Update
4/3/2012 9:31 AM ET

Following complaints from Apple Inc. (AAPL: Quote) and Microsoft Inc. (MSFT: Quote), the European Commission said Tuesday that it has initiated two formal antitrust investigations against Motorola Mobility Inc. (MMI: Quote) inquiring whether the company used some of its standard essential patents to distort competition in the internal market violating EU antitrust rules.

Motorola, which is being acquired by Google Inc. (GOOG), had sought and enforced injunctions against Apple's and Microsoft's flagship products on the basis of patents it had declared essential to produce standard-compliant products. The commission will probe whether Motorola through this action failed to honor its irrevocable commitments made to standard setting organizations.

In these commitments, Motorola engaged to license those standard-essential patents on fair, reasonable and non-discriminatory or FRAND terms. Motorola had given FRAND commitments to the relevant standard setting organizations, when the second and third generation mobile and wireless telecommunications system standards, the H.264 video compression standard and the standards for wireless local area network technologies were adopted.

The commission will examine whether Motorola's behavior amounts to an abuse of a dominant market position prohibited by Article 102 of the Treaty on the Functioning of the EU or TFEU.

Article 102 TFEU prohibits the abuse of a dominant position which may affect trade and prevent or restrict competition. 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 TFEU.

The opening of proceedings means that the commission will examine these cases as a matter of priority. "The Commission will assess whether Motorola has abusively, and in contravention of commitments it gave to standard setting organisations, used certain of its standard essential patents to distort competition in the Internal Market in breach of EU antitrust rules," a statement read.

In late January, the commission had opened proceedings against Samsung to investigate whether the company has failed to honour a FRAND commitment in licensing negotiations, including by seeking injunctive relief before the courts of certain member states in relation to standard essential patents.

MMI, which closed at $39.23 on Monday, is losing 0.10 percent in pre-market trading.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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