12. How do competition law rules on agreements, concerted practices, etc, apply to the standardisation process?
As stated above, the Standardization Guidelines apply to agreements, concerted practices, etc. in connection with the standardisation process. Under the Guidelines, while the standardisation itself is essentially pro-competitive, if agreements or concerted practices, etc, related to the standardisation activity restrict competition in relevant markets, or threaten to impede fair competition, they will pose legal issues with the AMA. Such anticompetitive agreements or concerted practices include the following.
(1) Restriction of the prices of the relevant products subject to the standardisation
Competitors in the standardisation activity jointly fix prices, production volumes, limit marketing activities, etc.
(2) Restriction of development of alternative specifications
Competitors in the standardisation activity mutually restrict, without due cause, the development of alternative specifications, or prohibit production or distribution of products with alternative specifications. (Restrictions may be allowed when a standardisation activity is effectively a joint research and development activity, in which a limited number of competitors confidentially develop a new product aiming to establish standards through competition.)
(3) Unreasonable extension of the scope of standardised specifications
Competitors in the standardisation activity jointly extend the scope of specifications, when doing so is not necessary to ensure compatibility among their products, but only to mutually restrict competition in developing new products.
(4) Unreasonable exclusion of technical proposals from competitors
Competitors deliberately, without due cause, prevent technical proposals by a certain competitor from being adopted in the standardisation process.
(5) Exclusion of competitors from the standardisation activities
Competitors deliberately exclude certain competitors from the activity, when this makes it difficult to develop and distribute the products with the standardised specifications if the competitors do not participate in the activity, and thus the competitors are at risk of being excluded from the market.
In addition to the above, the Standardization Guidelines discuss antitrust issues related to activities to pool patents for the standardisation, separately from the standardisation itself. If competitors pool their patents for standardisation, they can limit competition by mutually restricting the use of the patents and by restricting businesses of licensees. The Guidelines provide that such antitrust problems should be assessed on a case-by-case basis, considering market conditions such as the share of the products subject to the standardisation in the relevant market, and the position of the pool in that market, and both the anticompetitive and pro-competitive effects. In this regard, the Guidelines establish a safe harbour. In general, it will not cause a problem under the AMA, if (i) the market share of the pool is no more than 20 per cent in the related markets, or (ii) (if market share is inappropriate for analysis of the effect on competition) there are at least four available specifications, other than the standardised specification.
Answer contributed by
Jiro Abe and