Samsung is having a terrible, horrible, no good, very bad day today, after the European Union regulators announced the beginning of a formal investigation of the company to determine whether Samsung breached EU antitrust rules by using its patent rights to distort competition in European mobile device markets.
The EU will be investigating Samsung’s obligations under the FRAND (far, reasonable, and non-discriminatory) patent licensing terms, which disallow a patent from discriminating against smartphone manufacturers who want to use standard mobile technology and prevents the charge of excessive licensing fees.
According to the European Commission’s press release, in 1998, Samsung promised to license its standard, essential patents under FRAND terms, but in 2011, the South Korean company sued Apple over those very patents in Germany, France, and the Netherlands. Oops.
The case against Samsung is “a matter of priority,” since the European Commission needs to act before Samsung potentially wins a ruling based on one of its FRAND patents, and manages to enforce it, invalidating the whole system. If Samsung is found guilty of violating antitrust rules, it can be fined up to 10 percent of annual revenue related to the investigation.