Bloomberg News

Samsung Offers to Settle EU Antitrust Probe on Key Patents (1)

September 27, 2013

Samsung Electronics Co. (005930), the world’s biggest maker of smartphones, offered to settle a European Union probe into whether it tried to use mobile-phone patents to hinder competition from Apple (AAPL:US) Inc.

“After lengthy discussions, Samsung has sent us a set of commitments seeking to address our concerns,” EU Competition Commissioner Joaquin Almunia said today in a speech in New York. “We will formally market test these proposed commitments with other market participants in the coming weeks.”

The European Commission, the EU’s antitrust regulator, told Samsung last December it may have violated competition rules by seeking injunctions against Apple products in various European countries based on essential technology patents, so-called standard-essential patents, or SEPs, that it owns.

The EU is cracking down on patent abuses as Google Inc. (GOOG:US)’s Motorola Mobility Holdings (MMI:US) unit, Microsoft Corp. (MSFT:US), Apple and Samsung trade victories in divergent court rulings across the world on intellectual property. Almunia has said he is targeting “rules of the game” to prevent companies from unfairly leveraging their inventions to thwart rivals.

If, after it has tested Samsung’s remedies with rivals and complainants, the commission concludes that the commitments address its concerns, “we will take a commitment decision which would -- I believe -- bring clarity on SEPs and injunctions across the industry,” Almunia said today.

Antoine Colombani, a spokesman for Almunia, declined to comment on the details of Samsung’s remedies.

Constructive Talks

Samsung based in Suwon, South Korea, said it has been “in constructive” talks with the EU. It declined to comment on what remedies it has offered.

“We believe our proposals will provide appropriate resolution to reduce uncertainties” concerning standard essential patents “and confirm our long-standing commitment to fair and reasonable licensing of our technologies,” the company said in an e-mailed statement. “Samsung has always preferred to compete in the marketplace, not in courtrooms, and we will continue to invest in our intellectual property rights to promote innovations to benefit consumers and the industry.”

Samsung began seeking injunctions against Apple in courts in EU countries in 2011, based on alleged infringement of patents for 3G technology, according to the commission. The two companies have filed duelling patent lawsuits around the world over a variety of intellectual property issues.

Industry Agreements

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.

When the disputed mobile-phone technology was adopted in Europe as a standard, Samsung “gave a commitment that it would license the patents which it had declared essential to the standard on FRAND terms,” the commission said in 2012.

Samsung failed to prevent the EU complaint when it announced on Dec. 18 it plans to withdraw injunctions in Europe that seek to block sales of Apple products.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

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


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