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Annual European Competition Review 2020

McDermott’s Annual European Competition Review summarizes significant developments in the field of European competition law. 2020 saw several important legislative and policy developments, including EC guidance on foreign direct investment, the promulgation of a temporary framework for antitrust cooperation in the context of COVID-19 and the issuance of a rare competition law comfort letter thereunder. Furthermore, in addition to a number of interesting EC decisions, key judgments were handed down by the EU Courts, including in relation to the conditions for assessing “by object” infringements, the notion of “gun jumping” and jurisdiction under the EU merger regulation and tax planning measures under EU State aid rules. All these new rules and judicial decisions may be relevant for your company and your day-to-day practice.

In our super-connected age, because we are inundated with information from numerous sources it can be difficult to select what is really relevant to one’s business. The purpose of this review is therefore to help general counsel and their teams to be aware of, and to conduct their business in line with, essential EU competition law developments.

This review was prepared by McDermott’s European Competition Team in Brussels. Throughout 2020 they have monitored legal developments and drafted the summary reports.

Click here to read the full Review.

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New German Merger Control Thresholds: A More Business-Friendly Approach?

What Happened:

  • On January 19, 2021, major changes to German antitrust/competition law, i.e. the 10th Amendment Act to the German Act Against Restraints of Competition (ARC) entered into force.
  • In addition to introducing stricter abuse control, in particular over digital companies with a strong market position (so much so that one may refer to the act as the “ARC Digitisation Act”) and effecting changes to procedural rules and cartel prosecution, the new law also introduces substantive changes in merger control rules which may bring significant relief for international transactions. More information on the ARC Digitisation Act and other altered antitrust/competition rules  will follow in this blog.
  • The thresholds of German merger control have traditionally been very low in comparison to other international regimes. The German legislator has now decided to significantly increase the domestic turnover filing thresholds. Last week’s discussions in the German parliament and in its economic committee surprisingly resulted in even higher thresholds than originally proposed in the bill presented by the German government.


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Interim Measures Imposed on Broadcom: The Re-Awakening of a Once-Dormant Tool?

The European Commission (EC) has found, on a prima facie basis, that Broadcom abused its dominant position. In order to avert the risk of serious and irreparable damage to competition, Broadcom has been ordered to cease its prima facie abusive conduct with almost immediate effect. This is the first time in 18 years that the EC has made use of such measure and could signal the re-awakening of a once-dormant tool.

Access the full article.

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Intellectual Property and Antitrust: Italian Chapter

McDermott has authored the Italian chapter of the 2016 edition of “Intellectual Property & Antitrust” published by Getting the Deal Through, a valuable work tool for legal practitioners dealing with intellectual property and competition law.

This chapter addresses the statutes for granting IP rights, enforcement options and remedies, as well as the interplay between Italian IP and competition legislation, jurisdiction of competition and IP agencies, cartels, price maintenance, abuse of dominance and remedies.

Read the full article here.

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Abuse of IP Rights Under China’s Antitrust Rules: Recent Cases Have a Potentially Serious Impact

by Frank Schoneveld

Corporations doing business in China, based on their intellectual property (IP) rights, need to be aware of the potentially serious impact of China’s Anti-Monopoly Law and other antitrust rules.  China’s Anti-Monopoly Law prohibits the holder of IP rights from abusing those rights when it has a dominant market position.  Such dominance can be achieved under Chinese law with a market share as low as 10 percent.  Two recent cases demonstrate the greater reliance of Chinese companies on the antitrust rules, particularly when bargaining for lower royalties and license fees.

Interdigital v. Huawei

The Shenzhen Intermediate Court recently decided that Interdigital abused its patent rights by requiring Huawei to pay “excessive” royalties for essential patents for mobile telephone technology.  The license terms proposed by Interdigital to Huawei reportedly complied with the European Telecommunications Standards Institute’s policy as Fair, Reasonable and Non-Discriminatory (FRAND) terms.  However, the court found that the terms of the proposed license were not a FRAND complaint, and even if the offered licenses were a FRAND compliant, the royalties to be paid by Huawei should not exceed 0.019 percent of the sale price of each Huawei product using the patents.  This was significantly less than what Interdigital was prepared to accept (and reportedly less than that agreed upon in Europe for the same license).  In effect, Interdigital must now give Huawei a compulsory license at the lower royalty rate as fixed by the Chinese Court.  Interdigital has indicated it will appeal the decision. 

While the judgment has not been published, it is reported that other findings of the Shenzhen Intermediate Court include that Interdigital had also abused its IP rights by:

  • Tying the licensing of essential patents to the licensing of non-essential patents
  • requiring that Huawei provide a grant-back of certain patent rights

Microsoft v. Guangzhou Kam Hing

Another recent IP abuse case involves Microsoft, who reported Guangzhou Kam Hing to the Chinese local authorities in 2010 for using pirated Microsoft software.  This resulted in Guangzhou Kam Hing being fined by the Chinese authorities.  Subsequently, Microsoft filed a complaint to a local (Nansha) court claiming damages of RMB 4.7 million and requiring that Guangzhou Kam Hing purchase a specified quantity of genuine Microsoft software at a certain price.  Guangzhou Kam Hing has now brought proceedings in the Guangzhou Intermediate Court accusing Microsoft of abusing its IP rights by allegedly:

  • Applying quantity restrictions to reinforce its dominant position
  • Charging excessive prices thereby gaining “monopoly” profits

There was also a claim of discrimination in its pricing of software licenses based on differential pricing in Hong Kong and Mainland China for the same product.  It is unclear whether the claim of discriminatory pricing is being pursued.  The decision in this case is still pending.

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Waking Up a Sleeping Giant

by Wilko van Weert

The European Commission has invited comments as it reviews the current regime for Technology Transfer Agreements.  All stakeholders that have worked with the current set of rules will have a real interest in its improvement and should find it worthwhile to take part in the consultation process.  In order to be involved in the shaping of these proposals and not just in the polishing of them, it is important to submit comments ahead of the 3 February 2012 deadline.

To read the full article, click here

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