EC Opens Two Antitrust Investigations of MMI
The formal investigations come after both Microsoft and Apple complained that its prices were excessive
By: Maureen O'Gara
Apr. 4, 2012 09:00 AM
The European Commission Tuesday formally launched two parallel investigations into the prices Motorola Mobility is demanding for licenses to its standards-essential 2G and 3G wireless patents and Wi-Fi and online compression video patents.
The formal investigations [formal as in "we're already pretty sure where this is gonna come out"] come after both Microsoft and Apple complained that its prices were excessive - if not gouging - as well as anticompetitive when they were supposed to be fair, reasonable and non-discriminatory (FRAND).
For instance MMI wants a very unFRAND $4 billion a year from Microsoft, almost half the sales of its entertainment division last year. Microsoft, which is suing MMI for breach of contract in the states, claims it already licenses similar patents through a consortium and asked the US court to forbid MMI from enforcing an expected German injunction. To play it safe it's moving its distribution center out of Germany.
Anyway, the EC complaints also said MMI, encouraged by its soon-to-be parent Google, is using injunctions gotten based on alleged infringements of the patents to keep iPhone, iPad and Xbox out of the market. The litigation could be breaking EU competition laws.
The EC said it "will assess whether Motorola has abusively, and in contravention of commitments it gave to standard setting organizations, used certain of its standard essential patents to distort competition." It's also looking at the sheer size of its license demands. Either could land MMI in an antitrust quagmire.
Motorola and Google were warned when the EC waved their $12.5 billion merger through in February that MMI could be investigated for its pricing. It could be fined up to 10% of its annual revenues. Naturally MMI claims it's in compliance with the antitrust laws.
The EC is investigating fellow Android peddler Samsung for FRAND abuse too. Ditto Google, but for abuse of its dominance in search.
The Google-Motorola merger is waiting on approval from China's regulators.
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