Samsung Probed by EU Antitrust Regulator Over Mobile Patents

Samsung Electronics Co. (005930) is being probed by European Union antitrust regulators over licensing of patents to other mobile-phone manufacturers.

The European Commission said it will investigate whether Samsung broke a 1998 commitment to license any standard essential patents for phones on “fair, reasonable and non- discriminatory terms.” It acted after Samsung claimed last year in European courts that rivals infringed its patents, the EU said in a statement.

Regulators have increased scrutiny of intellectual property rights, with EU antitrust chief Joaquin Almunia saying last month that he wanted to ensure patents weren’t used to block rivals’ expansion. He is also probing Honeywell International Inc. and DuPont Co. over chemical patents and is looking into standards in the banking industry.

The EU is “very interested in standards because of their increased importance in view of the telecom boom and the disputes that are going on in the handheld industry,” said Douwe Groenevelt, a lawyer with De Brauw Blackstone Westbroek NV in Brussels. Companies that own “standards-essential patents are in a very powerful position” because rivals must ask for a license to make products compatible with industry norms.

James Chung, a spokesman for Samsung in Seoul, Korea, declined to immediately comment on the EU investigation.

Licensing Terms

The EU commission will investigate whether Samsung broke EU monopoly abuse rules and violated a commitment to the European Telecommunications Standards Institute over licensing terms by using “certain of its standard essential patent rights to distort competition in European mobile device markets,” the Brussels-based agency said in an e-mailed statement today.

The EU said in November that it was quizzing Samsung and rival Apple Inc. over the use of patents. Both companies were sent requests for information about “the enforcement of standards-essential patents in the mobile-telephony sector,” the EU said at the time.

Alan Hely, a spokesman for Apple (AAPL) in London, declined to comment. Cupertino, California-based Apple said in a U.S. court filing in October that Samsung faced an EU probe into its “egregious” misuse of patents.

Apple, Samsung Cases

Apple and Samsung have filed intellectual property lawsuits against each other in at least 10 countries, according to Samsung. The legal battle between Apple and Samsung, its closest competitor in tablet computers, has intensified as consumers use devices such as tablets and smartphones to surf websites, play games and download music.

Samsung today lost a bid to overturn a German sales ban on its Galaxy 10.1 tablet computers obtained by Apple in an intellectual property dispute.

European Union regulators have had mixed success with antitrust cases over standards. The EU settled a probe of memory-chip designer Rambus Inc. (RMBS) in 2009 into so-called “patent ambush.” The practice involves patent owners hiding their intellectual property so they can demand royalties from other companies forced to use the same technology once it becomes a standard.

The commission dropped a four-year probe into Qualcomm Inc. (QCOM), the biggest maker of chips for mobile phones, started after competitors complained the chipmaker was charging excessive royalties on patents.

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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