Licensing in the perspective of EC Competition Law

Abstract

Competition law is an important area of Community law. It influences a lot of the everyday business of companies all over the world. The two most important regulations are Article 81 and 82 of the EC Treaty. These are the base for the competition authorities and also for the institutions within the Community when it comes to issuing different types of regulations. Article 81 is addressed to companies and regulates the situations when two undertakings enter into agreements. If these agreements fulfill the criteria in the article they are considered to be in conflict with European Competition Law, and shall therefore be considered void. The 3rd paragraph of Article 81 does however contain exemptions that can make it possible for the companies to uphold their agreement even if it fulfills the first part of the article. Article 82 regulates the situation when one or more dominant undertakings act on the market. An undertaking is not prevented from holding a dominant position on the market but when there is an abuse of this position competition rules are there to regulate this conduct. There is a clear connection between Article 81 and 82. They can be applied to the same agreement and the application of Article 81(3) does not prevent the application of Article 82. It has been made clear that Article 81(3) cannot be applied to permit an abuse of a dominant position.

Licensing is an area that is growing rapidly and that is becoming more and more important on the market. This area is under great influence from competition rules and there are several different Community regulations that has to be considered. One of the most important ones is the Technology Transfer Block Exemption Regulation. This regulation has undergone changes lately and a new block exemption was adopted last year. Some major changes were made, mainly so that the regulation now has an economic and effect-based approach instead of the old legalistic and form-based approach. One of the changes important for this thesis is that software now is included in the TTBER. This means that licensing of software will have a new regulation to take into account when conducting business. Critique has been heard that the new TTBER is not adapted for software licensing and that this will create problems. Since the TTBER is not even a year old yet it is hard to say if there are any big difficulties for the software industry.

In relation software licensing it is important to consider the Council Directive on the legal protection of computer programs. Interoperability is regulated by this directive and that is important when it comes to software and software licensing. It is often in relation to Article 82 EC that these kind of questions arise since it can be an abuse of dominant position to prevent competitors from being able to create programs that interact with these of the dominant undertaking. There has been some interesting decisions from the Commission and judgments from the European Court of Justice on this matter. The most recent one that has gotten a lot of media attention is the Microsoft decision where Microsoft was obliged to release interface information to competitors so that interoperability was achievable.

As will be seen in this thesis, there are several things that has to be considered when it comes to licensing in the European Community. As mentioned, the TTBER is one of the most important regulations to keep in mind and it can give a lot of companies guidance when it comes to concluding agreements. If the companies fall below the market share threshold set out in the TTBER many clauses in the agreements will be permitted even if they would not have been if the companies would have had bigger market shares. The market shares is one of the big difficulties in the TTBER since the assessment can be very hard to do. Depending on the definition of relevant product and technology markets the market shares can differ. The rules in the TTBER are somewhat different depending on if the actors are competitors or not and that will make the regulation even more complicated. The TTBER is an regulation that is complicated and it might require some knowledge to apply it. The Commission has issued guidelines to help with this and these guidelines are almost as important as the regulation itself. The two documents, the regulation and the guidelines shall be read together and seen more as a whole than two separate things.