Recently, the EU Commission warned Nokia that “if Nokia were to take illegal advantage of its patents in the future (as a patent troll), we will open an antitrust case." The issue will be how the European Commission can enforce antitrust liability on Nokia’s patent troll business.
Article 102 of the TFEU (Treaty of Functioning of EU) prohibits the abuse of a dominant market position. Abuses include (1) imposing unfair or discriminatory terms; (2) limiting production, markets or technical development; (3) applying dissimilar conditions to equivalent transactions and (4) make contracts subject to acceptance of supplementary obligations which have no connection with the subject of such contracts. Generally, a market share in excess of 40% can be considered as indicate dominance dominant market position.
If we assume that Nokia sues smartphone manufactures, because Nokia will not produce smartphones anymore, Nokia will not have the market dominance in the smartphone product market. Thus, the story will be completely different from the recent antitrust accusation of Samsung and Google when they exploit their standard essential patents (SEPs) in litigations, unless Nokia also exploits SEPs and the EU Commission can link the dominant in the technology (patent) market with the product market.
On the other hand, Article 101 of the TFEU prohibits agreements which prevent, restrict or distort competition among EU member states. Article 101(3) specifies prohibited agreements: (1) fix purchase or selling prices or any other trading conditions; (2) limit or control production, markets, technical development, or investment; (3) share markets or sources of supply; (4) apply dissimilar conditions to equivalent transactions and (5) make contracts subject to acceptance of supplementary obligations which have no connection with the subject of such contracts. Thus, the EU Commission may can enforce antitrust liability on Nokia’s patent licensing business practices if they are under the liabilities of Article 101 of the TFEU.
Considering the history and policy of EU’s antitrust enforcement, the EU Commission may find ways to handle the Nokia’s matters. Antitrust agencies and courts in the EU tend to infer antitrust liabilities from the nature of accused activities rather than their effects. In order to protect competition, antitrust agencies and courts in the EU seek to prevent an interference with the freedom to compete. Thus, the EU commission will willingly interrupt to Nokia’s patent troll business to correct market for more competitive environment.
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