Bloomberg News

Samsung Faces EU Antitrust Complaint Over Apple Patent Clash

December 20, 2012

Samsung Electronics Co. (005930) faces a European Union antitrust complaint over its use of standard- essential patents in legal disputes with Apple Inc. (AAPL:US), the EU’s competition commissioner said.

“We will adopt the statement of objections very soon,” Joaquin Almunia, the bloc’s antitrust chief, said at a press conference in Brussels today. He said the formal notice listing antitrust concerns could be sent as soon as the end of the year. The EU is probing whether Samsung violated agreements to license key patents to other mobile-phone manufacturers on fair terms.

Samsung and Apple, the world’s two biggest smartphone makers, have traded victories in their patent disputes fought over four continents since Apple accused Asia’s biggest electronics maker of “slavishly copying” its devices. The companies, competing for dominance of the global smartphone market estimated by Bloomberg Industries at $219 billion last year, are fighting patent battles even as Apple remains Samsung’s biggest customer.

While regulators were “happy” with Samsung’s announcement this week that it will withdraw injunctions in Europe that seek to block sales of Apple products, Almunia said the commission will continue to investigate whether Samsung’s threats to use legal action harmed competition.

Legal ‘Threat’

“We are dissatisfied every time that we see the launching of injunctions” involving standard-essential patents,” Almunia told reporters at a press conference in Brussels. “The injunctions in the Apple-Samsung case were launched; it was not only a threat.”

Samsung, based in Suwon, South Korea “is fully cooperating with the European Commission proceedings,” according to an e- mailed statement.

The company earlier this week said it would withdraw injunction requests against Apple in Germany, U.K., France, Italy and Netherlands involving key patents it holds for wireless communications, citing “the interest of protecting consumer choice.”

The company will continue litigation that seeks damages in intellectual property disputes.

Under phone industry agreements on standards, companies owning the rights to essential technology must usually license it to competitors on fair, reasonable and non-discriminatory terms, known as FRAND.

Closely Watched

The EU’s reasons for taking action against Samsung will be closely watched by companies involved in licensing industry standards “on whether you can enforce a standard-essential patent and under what circumstances,” said Douwe Groenevelt, a lawyer for De Brauw Blackstone Westbroek in Brussels. The EU may weigh in on wider issues to define what FRAND is and what costs should be set for using standard-essential patents.

Google Inc.’s (GOOG:US) Motorola Mobility Holdings Inc. is also being investigated by the EU for seeking and enforcing injunctions against Apple’s iPhone and iPad and Microsoft’s Windows operating system and Xbox gaming console, following complaints by the two companies.

The patent disputes began when Samsung released its Galaxy smartphones in 2010. Apple co-founder Steve Jobs vowed before his death last year to wage “thermonuclear war” to prove that phones run on Google Inc.’s Android operating system copy the iPhone.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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