Standard Setting 2010

The Swedish Competition Authority Director General Dan Sjöblom opened the seminar and welcomed the 90+ participants from 14 countries. The moderator, Svend Albaek from DG Competition continued by introducing the topic and said that in the ongoing revision of the guidelines on horizontal co-operations agreements, the chapter on standard setting was the one which had raised most comments.

The first speaker, Tineke M. Egyedi from Delft University of Technology started with illustrating the problem of lack of standards by referring to mobile phone chargers. She then guided us through a case of two competing standards issued by the same standard setting organization. In his role of discussant, Jörg Nothdurft of the Bundeskartellamt posed the question: Is competition a bad thing when it comes to setting committee standards? His answer was that we have to weigh the efficiencies gained by committee standards against the losses.

The next speaker, Klaus M. Schmidt from University of Munich, talked about the complements problem that arises when input goods are perfect substitutes and offered by monopolies. When it comes to standards the complements problem arises since standards are based on patents. He continued by showing how patent pools can solve the problem. Laure Durand -Viel of the French Competition Authority, who commented on the presentation, noted that the complements problem is acknowledged in the guidelines on technology transfers agreements. She concluded with outlining some practical problems with the patent pool setup proposed by Schmidt.

Anne Layne-Farrar from LECG guided us through the change in invention. From being done by large vertically integrated firms, invention is now done by a multitude of firms, with different business models. She suggested competition authorities should focus on the conduct rather than the business model. The discussant, Jan Kees Winters of the Netherlands Competition Authority, noted that the main problem is how competition law can be applied effectively and efficiently.

Richard J. Gilbert of the University of California at Berkeley searched for the meaning of fair, reasonable, and non-discriminatory (FRAND) royalties. He suggested a shift in focus from discussing what fair and reasonable means to a workable application of the non-discriminatory component of FRAND. The discussant, Juan Delgado from the National Competition Commission in Spain agreed that issues of ethics, fairness and morality are not the core competences of competition authorities. He went on to question what role Gilbert saw for the competition authorities in standard setting.

The final speaker, Damien Geradin of Tilburg University and Howrey LLP started with asking: Is there a competition problem or is it just that different members of a standard setting organization have different interests? He then examined the literature on patent hold-up and concluded that the risks have been exaggerated. Julie Bon of the Competition Commission, UK, who commented on the presentation stressed that whether the current system strikes the right balance between protection of patent holders and prevention of patent hold-up is an empirical question. Are innovators in standardized areas under-rewarded for their investment?

The contributros of the Pros and Cons 2010.
The contributors (back row, from the left): Dan Sjöblom, Jan Kees Winters, Klaus M.Schmidt, Svend Albaek, Tineke M. Egyedi, Anne Layne-Farrar, Juan Delgado, Damien Geradin, Laure Durand-Viel, Richard J. Gilbert, Julie Bon, Jörg Nothdurft.

Related information