Rambus Inc is a technology licensing company that owns various patents in the field of memory chips. On 30 July 2007 the European Commission sent Rambus a Statement of Objections, in which it set out its preliminary view that Rambus may have infringed then Article 82 of the EC Treaty (now Article 102 TFEU, see below) by abusing its dominant position in the market for DRAM memory chips. These chips, which are used to store data temporarily, are currently being used in practically all PCs. In 2008, worldwide DRAM chips sales exceeded US$ 34 billion.
The alleged abuse of a dominant position by Rambus was a so-called "patent ambush". The Commission describes a "patent ambush" as a system failure of the standard-setting process, which occurs when a company taking part in the standard-setting process hides the fact that it holds essential (patent) rights over the standard being developed. The reason for this concealing is that after the standard has been set, and other producers are therefore bound by it, the company may bombard these producers with patent claims and royalties. In the preliminary view of the Commission, Rambus was guilty of this abuse and combined it with claiming unreasonable royalties for the use of the patented technology. In this case JEDEC, the organization that developed the industry standard for DRAM together with, among others, Rambus, did not know that Rambus held essential patents.
This preliminary view caused Rambus to propose a number of commitments to address the concerns. These commitments vary from putting a worldwide cap on the royalty rates for existing and future technologies to abolishing the rates for older technologies. On 9 December 2009 the Commission took a so-called "commitment decision" based on Article 9 of Regulation 1/2003. In this decision the Commission did not come to a finding of an infringement of competition law, but established that if Rambus will keep to the commitments it has offered, the Commission's investigation will end. In short: the commitments have effectively taken away the concerns the Commission had formulated in its preliminary view. If Rambus were to break its commitments, for example by still claiming higher or additional royalties, the Commission could impose a fine of up to 10% of the annual turnover of Rambus, without having to find an infringement of the antitrust rules.
Standards and their development have long been in the interest of the Commission.
The Commission's Guidelines on Horizontal Cooperation include a section on standard-setting and set out that "to avoid elimination of competition access to the standard must be possible for third parties on fair, reasonable and non-discriminatory terms." As a result, standard developing organisations generally require their members to commit to license their essential intellectual property rights on FRAND terms as a condition for inclusion in their standards. With these FRAND terms, which is an abbreviation of Fair, Reasonable and Non Discriminatory, situations such as the one described above with Rambus, can be avoided. Earlier, in the "White Paper Modernising ICT Standardisation in the EU - The Way Forward", the Commission also stressed the importance of FRAND.
Renumbering
Furthermore, last December an important change took place in competition law with the entry into force of the Treaty of Lisbon on 1 December 2009. This Treaty amends the Treaty on European Union ("TEU") and the Treaty establishing the European Community ("EC Treaty"). Because the European Union replaces and succeeds the European Community, all references to Community are replaced by Union. The EC Treaty is now called the Treaty on the Functioning of the European Union ("TFEU") and the Court of Justice of the European Communities is now called the Court of Justice of the European Union. As a result of the almost complete rewriting of the TFEU compared to the EC Treaty, a number of key provisions in competition law have been renumbered. The old Articles 81 (ban on agreements that disrupt competition) and 82 (ban on abuse of a dominant position) are now to be found under Articles 101 and 102 of the TFEU. The provisions have not changed in substance. A consequence of the Treaty of Lisbon which has aroused some discussion is that the objectives of the Union, which were previously in the EC Treaty but have now been moved to the TEU, no longer refer to a regime of undistorted competition. Although commentators initially feared that this might be detrimental to the Commission's possibilities of enforcing compliance with competition law, this problem (if it ever existed) has been solved by a new protocol to the TEU, which mentions this objective.
