Europe investigates Samsung for anti-competitive call in Apple iPhone war

By Jonny Evans

Confirming my November report, it’s Samsung and not Apple [AAPL] who faces the wrath of EU competition regulators, who today announced a probe into the company over possible patent rights abuses in its smartphone war with the iPad/iPhone-maker.

[ABOVE: Nothing like an iPad, really, no, really.]

What happens to a curious copycat?

Meanwhile, in a separate slice of bad news for Apple’s one-time ally, a German court has upheld the ban on Samsung’s Galaxy Tab 10.1. Presiding Judge Wilhelm Berneke said: “Samsung wrongfully takes advantage of the enormous reputation and prestige of the iPad,” Berneke said. “Samsung unfairly imitates the iPad with its tablet.“

“It’s too early to talk about a cross-licensing agreement, but we have to admit that is a scenario that has become likelier than before,” Samsung has since told The Inquirer.

Whether Apple will be willing to license its proprietary technologies to its newly-fettered smartphone foe is in doubt, given Samsung’s refusal to reach fair terms for some essential 3G technologies.

The latter has led the European Commission to investigate whether Samsung has used some of its IP rights to “distort competition in European device markets“.

This relates to the continued litigation between Apple and Samsung in that the commission wants to know if Samsung has failed to deliver on its commitment to license key 3G technologies to rivals.

[ABOVE: Not a tab.]

Un-Frand

It’s all about the Frand. Under these Frand deals IP owners agree to license innovations that are essential to fair use of agreed industry standards. IP owners are not permitted to discriminate against any other party wanting to license the technologies, and cannot charge excessive fees.

While not being specific, the regulator evidently points to some of the litigation between Apple and Samsung, saying: “In 2011, Samsung sought injunctive relief in various member states against competing mobile device makers based on alleged infringements of certain of its patent rights which it has declared essential to implement European telephony standards.”

In order that Apple deploy 3G in its phones it must secure licenses for the various technologies included within the 3G standard.

Some of these technologies come from Samsung, and have been made available for license by friends and competitors alike — that’s the point of the standard. Apple has previously accused Samsung of demanding onerous terms for use of these technologies, in contravention of the Frand standards commitment. Europe has clearly seen some strength in these complaints, though no public complaint has been filed.

Fair play

Samsung has made claims in various countries that relate to Apple’s use of IP required to be made available under a Frand license for 3G. There’s cases against Cupertino filed in Germany, the Netherlands, France and Italy in this regard. Court decisions so far have rejected Samsung’s attempts.

In a release, the European Commission promised it: “Will investigate, in particular, whether in doing so Samsung has failed to honour its irrevocable commitment given in 1998 to the European Telecommunications Standards Institute (ETSI) to license any standard essential patents relating to European mobile telephony standards on fair, reasonable and non-discriminatory (FRAND) terms. The Commission will examine whether such behavior amounts to an abuse of a dominant position prohibited by Article 102 of the Treaty on the Functioning of the EU (TFEU).“

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

Europe’s regulators began looking into the case a few months ago. FossPatents Florian Mueller notes: “It goes without saying that Samsung is innocent until proven guilty of abuse. But the launch of a full-blown investigation after a few months of preliminary investigations is an important step. This means European competition enforcers have received information, in response to questionnaires (sent to Apple, which may have informally complained, and Samsung) that warrant a more formal effort.”

Rabbit in the headlights

Mueller also warns that the imminent Google purchase of Motorola Mobility could lead to more attempts to limit open competition in the smartphone industry in the event Google puts, “its muscle behind widespread FRAND abuse post-acquisition.” To which some may quip, “Don’t be evil.”

Apple must be taking some pleasure in knowing Samsung — briefly the world’s biggest smartphone maker — is now facing some pressure regarding its imitative and potentially anti-competitive ways.

Samsung meanwhile is staring at the imminent Google Motorola Mobility acquisition, a series of potentially expensive lawsuits worldwide, and the increasing complexity of doing business as an Android licensee. This has driven the firm to begin exploring new software solutions to drive its future in the smartphone space.

In my opinion, in the absence of any great inspiration, Samsung’s glory days in this sector are almost done. Time will tell if I’m right.

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