Setting the right standard

Many recent competition law cases (Microsoft, Rambus, Qualcomm) revolve around standard-setting issues. Standardization is generally seen as a good thing. It may be the natural outcome of market interaction, perhaps following the outburst of a 'standard war'. It can also arise from a so-called cooperative procedure in a standard-setting organization (SSO), where interested parties negotiate the technological boundaries of the standard-to-be-adopted. On 23 January 2009, TILEC devoted a seminar to this topical issue. Heike Schweitzer (European University Institute, Florence) described the European regime currently applied to SSOs. This regime is characterized by near-complete immunity under article 81 EC but allows for the prosecution of various conducts under article 82, sometimes on grounds of otherwise rarely-invoked exploitative abuses. This combination apparently favors cooperative standard-setting over competition in the market. Jorge Padilla (LECG) exposed the various economic issues at stake, among which the determination of the prices paid to technologies considered for inclusion in a standard stands out. Although various proposals have been made to set them at the right level, it was argued that a lot of them disregard the recent appearance of pure (i.e. non-vertically integrated) innovators, whose interests may not be sufficiently protected by the current regime.