[802SEC] EC reserves right to stir standards sandbox
In spite of the US findings to the contrary, the EC has decided that
either Rambus "misbehaved" or JEDEC did not have sufficient processes to
Note the paragraph I have emphasized
Brussels, 12 June 2009
Antitrust: Commission market tests commitments proposed by Rambus
concerning memory chips
The European Commission has invited comments from interested parties on
commitments offered by microchip designer Rambus to meet concerns that
it may have infringed EC Treaty rules on abuse of a dominant position
(Article 82) by claiming unreasonable royalties for the use of certain
patents for “Dynamic Random Access Memory” chips (DRAMS) (see
MEMO/07/330 ). Rambus in particular is prepared to commit to put a cap
on its royalty rates for the five year duration of these commitments.
The cap includes a "Most-Favoured-Customer" clause which would ensure
any future rate reductions would benefit the whole market. Interested
parties can submit comments within one month from the date of
publication. Following the market test, the Commission may decide to
adopt a decision under Article 9 (1) of Regulation 1/2003, making the
commitments legally binding on Rambus.
On 30 July 2007, the European Commission adopted a Statement of
Objections against Rambus, a company incorporated in Delaware, USA. This
outlined the Commission’s preliminary view that Rambus may have
infringed Article 82 of the EC Treaty by abusing a dominant position in
the market for Dynamic Random Access Memory (DRAMs). DRAMs are used to
temporarily store data in products such as PCs.
JEDEC, an industry-wide standard setting organisation, developed an
industry standard for DRAMs. JEDEC-compliant DRAMs represent around 95%
of the market and are used in virtually all PCs. Worldwide sales of DRAM
chips in 2008 exceeded 34 billion US Dollars. Rambus claims its patents
cover technologies included in these JEDEC standards and is asserting
these against manufacturers of DRAMS that comply with the JEDEC standard.
The Commission’s preliminary view, set out in the Statement of
Objections, was that Rambus engaged in intentional deceptive conduct in
the context of the standard-setting process, for example by not
disclosing the existence of the patents and patent applications which it
later claimed were relevant to the adopted standard. Against this
background, the Commission's provisional view, as outlined in the
Statement of Objections, was that Rambus was abusing its dominant
position by claiming unreasonable royalties for the use of its patents
against the JEDEC-compliant DRAM manufacturers at a level which, absent
its conduct, it would not have been able to charge.
Following the Statement of Objections, Rambus proposed commitments to
address the Commission's concerns. In particular, Rambus commits during
five-years to put a cap on its royalty rates for products compliant with
the JEDEC standards.
> The Commission considers that an effective standard
> setting process should take place in a non-discriminatory,
> open and transparent way to ensure competition on the
> merits and to allow consumers to benefit from technical
> development and innovation. Standards bodies should be
> encouraged to design clear rules respecting these principles.
> However, in a specific case where there appear to be
> competition concerns, the Commission will investigate
> and intervene as appropriate.
As required by Article 27 (4) of Regulation 1/2003, a so-called " market
test notice" with a summary of the proposed commitments has been
published in the EU's Official Journal on 12 June 2009. The full version
of the commitments is available on the Commission's website at:
Interested parties are invited to present their comments within one
month of the publication in Official Journal .
Under Article 9 of Regulation 1/2003, the Commission may decide to make
the commitments legally binding on Rambus. Such an Article 9 decision
would find that there are no longer grounds for action by the
Commission, without concluding whether or not there has been or still is
an infringement of EC antitrust rules.
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