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EU investigates Motorola after Apple, Microsoft complaints

April 03, 2012|By Michelle Maltais

European regulators are investigating whether phone maker Motorola Mobility overcharged Apple and Microsoft for use of its patents in products such as the iPhone and Xbox, in violation of antitrust laws.

The European Commission, the antitrust watchdog of the 27-country European Union, said it has opened two investigations into whether Motorola is requiring unfair fees for licensing its patents essential for 2G and 3G wireless technology standards as well as for Wi-Fi connection and H.264 video compression, based on grievances filed by Apple and Microsoft, respectively.

The formal investigations were announced after both companies complained to the commission that Motorola, which is being acquired by Google, was using legal injunctions against their key products to gain an edge in the market. This comes as the EU has recently heightened its scrutiny of suspected abuse regarding essential patents.

The commission 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."

Motorola Mobility already received a warning from the commission against aggressive patent enforcement when the commission approved Google Inc.'s $12.5-billion takeover of the cellphone maker in February.

"Motorola is asking for the moon, and if such out-of-this-world royalty demands don't trigger antitrust intervention," wrote intellectual property analyst Florian Mueller, "antitrust enforcement agencies will probably never take action against those attempting to force implements of standards into agreements on anticompetitive terms."

Google's $12.5-billion bid for Motorola Mobility would be the largest acquisition in the Californian company's history once it gets full regulatory approval. The U.S. also cleared the deal, which was announced last summer, but it still needs approval from China.

This investigation comes on the heels of Microsoft's announcement Monday that it plans to relocate its European distribution center from Germany to the Netherlands over patent disputes.

"We have a great relationship with Arvato, and we are pleased with the quality of their service. But Motorola's refusal to live up to its patent promises has left us no choice," Microsoft said in a statement. "We would have preferred to keep our European distribution centre with Arvato in Germany as it has been for many years, but unfortunately the risk of disruption from Motorola's patent litigation is simply too high."

Motorola is suing Microsoft in Germany over the H.264 video compression codec. This suit, central to Microsoft's complaint to the commission, accuses the software maker of using its patents in Windows 7,  Xbox, Internet Explorer 7 and Windows Media Player without permission. A ruling from the Mannheim Regional Court is due April 17. 

The Associated Press and Reuters contributed to this report.

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