Excessive Pricing in Sep Licensing : The Necessary Limits for Competition Authorities

Excessive pricing is an area of competition law that diverged significantly. In general, due to the lack of economic stimulation analysis, the competition authorities have only intervened limited cases related to abuse of dominant position by charging excessively unfair price. In certain circumstances, where the patent holder has been conferred the market dominant position by the standard essential patent, the exclusivity of the patent creates incentives for the proprietor to request for monopolistic royalty fees, and consequently diminish the dynamic competition of the market. Against this background, the purpose of this paper is to review the significant cases in the EU and China with the control of excessive pricing in SEP licensing. Competition authorities have addressed clear and predictable rules in defining the SEP holders’ market power. As to assess whether the royalty fees SEP holders charged is competitively “excessive” high, various approaches have been adopted. The competition authorities also include a wide range of tangible and intangible factors, such as demand-side aspects, initial investment, intangible value and opportunity cost. However, practical difficulties demonstrate the incompetence the competition authorities in controlling excessive pricing. Thus, the potential for organizations, such as SSOs, which have long been attached to the industries and have insightful observations in standard setting and implementing procedures, to become an alternative disputes resolution as litigations will be discussed