19.4.2022
EN
Official Journal of the European Union
C 164/93
466.
Participants in standardisation are not necessarily competitors.
Standard development can, however, in specific circumstances where competitors are involved, also give rise to restrictive effects on competition by potentially restricting price competition and limiting or controlling production, markets, innovation or technical devel­ opment.
As further explained below, this can occur through three main channels, namely (i) reduction in price competition, (ii) foreclosure of innovative technologies and (iii) exclusion of, or discrimination against, certain undertakings by prevention of effective access to the standard.
467.
First, if undertakings were to engage in anti-competitive discussions in the context of standard development, this could reduce or eliminate price competition in the markets concerned or limit or control production, thereby facilitating a collusive outcome on the market (266).
468.
Second, standards that set detailed technical specifications for a product or service may limit technical development and innovation.
While a standard is being developed, alternative technologies can compete for inclusion in the standard.
Once one technology has been chosen or developed and the standard has been set, some technologies and undertakings may face a barrier to entry and may potentially be excluded from the market.
In addition, standards requiring that a particular technology is used exclusively for a standard can have the effect of hindering the development and diffusion of other technolgoies.
Prevent the development of other technologies by obliging the members of the standard development organisation to exclusively use a particular standard, may lead to the same effect.
The risk of limitation of innovation is increased if one or more undertakings are unjustifiably excluded from the standard development process.
469.
In the context of standards involving intellectual property rights (‘IPR’) (267), three main groups of undertakings with different interests in standard development can be distinguished in the abstract.
Firstly, there are upstream-only undertakings that solely develop and market technologies.
This can also include undertakings that acquire technologies with the purpose to licensing these.
Their only source of income is the licensing revenue and their incentive is to maximise their royalties.
Secondly, there are downstream-only undertakings that solely manufacture products or offer services based on technologies developed by others and that do not hold relevant IPR.
Royalties represent a cost for them, and not a source of revenue, and their incentive is to reduce royalties.
Finally, there are integrated undertakings that both develop technology protected by IPR and sell products for which they would need a licence.
These undertakings have mixed incentives.
On the one hand, they could draw licensing revenue from their own IPR.
On the other hand, they may have to pay royalties to other undertakings holding IPR essential to the standard relevant for their own products.
They might therefore cross-license their own essential IPR in exchange for essential IPR held by other undertakings or use their IPR defensively.
In addition, undertakings may also value their IPRs through methods other than royalties.
In practice, many undertakings use a mix of these business models.
470.
Third, standardisation may lead to anti-competitive results by preventing certain undertakings from obtaining effective access to the results of the standard development process (that is to say, the specification and/or the essential IPR for implementing the standard).
If an undertaking is either completely prevented from obtaining access to the result of the standard, or is only granted access on prohibitive or discriminatory terms, there is a risk of an anti-competitive effect.
A system where potentially relevant IPR is disclosed up-front may increase the likelihood of effective access being granted to the standard (268) since it allows the participants to identify which technologies are covered by IPR and which are not.
Intellectual property laws and competition laws share the same objectives (269) of promoting consumer welfare and innovation as well as an efficient allocation of resources.
IPR promote dynamic competition by encouraging undertakings to invest in developing new or improved products and processes.
IPR are therefore in general pro- competitive.
However, by virtue of its IPR, a participant holding IPR essential for implementing the standard, could, in the specific context of standard development, also acquire control over the use of a standard.
When the standard constitutes
(266) Depending on the circle of participants in the standard-development process, restrictions can occur either on the supplier or on the purchaser side of the market for the standardised product.
(267) In the context of this Chapter, IPR in particular refers to patent(s) (excluding non-published patent applications).
However, in case any other type of IPR in practice gives the IPR holder control over the use of the standard the same principles should be applied.
(268) If also accompanied by a FRAND commitment.
See paragraphs 482-484.
(269) See Technology Transfer Guidelines, paragraph 7.