Patent, Reasonable, Rates, Antitrust


The Institute of Electrical and Electronics Engineers Standards Association’s (“IEEE-SA”) updated patent policy and a business review letter issued by the United States Department of Justice (“DOJ”) have caused much discussion in the United States. The purpose of this Article is to assess whether a similarly lenient antitrust approach to Standard Setting Organizations’ (“SSOs”) rate-setting policies would prevail under the European Union’s (“EU”) competition rules. Recent EU competition case law has promoted a very hard line in the area of coordinated conduct. Cases such as Dole Food Company, Inc. v. European Commission, T-Mobile Netherlands BV v. Raad van bestuur van de Nederlandse Mededingingsautoriteit, and Expedia, Inc. v. Auto-rité de la concurrence have expanded the scope of the per se prohibition rule found in article 101 of the Treaty on the Functioning of the European Union (“TFEU”) to forms of horizontal coordination with less than obvious anticompetitive potential, such as “cheap-talk” pre-pricing communication (Dole Food Company), episodic collusion (T-Mobile), and horizontal agreements with limited market coverage (Expedia). Those judgments, and others, share a common rationale—that of deter-ring any coordinated interference with the price system. In the EU courts’ view, joint interference by competitors with the price system seems to be a sin in itself, regardless of actual or potential market effects. Horizontal coordination is thus increasingly prohibited on its incipiency, and punished as a means to set an example. From an enforcement stand-point, this trend in the case law has pros (lower enforcement costs) and cons (deters pro-competitive coordination). But, perhaps more importantly, it has a major normative implication, which is that it raises the antitrust risk for all forms of coordination, including arrangements of the type found in the IEEE-SA updated patent policy. This Article explains that the antitrust risk generated by SSOs rate-setting policies is presumably higher in the European Union than in the United States, where the case law on horizontal coordination is less stringent.