Abstract

Collaborative standardization, an efficient and inclusive form of organized innovation under the auspices of standard-setting organisations (SSOs), has demonstrated significant technological achievements in the field of wireless telecommunications. At the core of collaborative standardization is a working balance of interests and incentives of all stakeholders involved, i.e. contributors of technology and users of standards, epitomized by licensing on FRAND terms. Standardization contributes to significant gains in consumer welfare, in the form of lower prices, more innovation and more consumer choice and convenience. At the same time, standardization fosters competitive markets, upstream and downstream. Public policy has not always been successful in accommodating collaborative standardization. The enforcement of Art. 102 TFEU by the EU Commission, for instance, reveals an underlying mistrust of the operation of markets in the context of collaborative standardization and a strong preference for court-determined FRAND terms. However, the recent CJEU ruling in Huawei v. ZTE provides strong incentives for private stakeholders to determine FRAND through bilateral commercial negotiations and as such it is a welcome shift in EU competition policy in collaborative standardization.

Highlights

  • In the past few decades information and communication technologies have transformed every aspect of human endeavour; mobile technologies, being the most rapidly adopted technologies in human history, have fundamentally changed the way we work, learn, travel, consume and communicate with each other.[1]

  • Collaborative standardization in wireless telecommunications has a remarkable record of technological achievement and innovation

  • Standardization in wireless telecommunications is driven by a self-reinforcing dynamic: investment and innovation in wireless standards make markets and consumer demand grow; in turn, increasing consumer demand triggers more investment and innovation in wireless standards

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Summary

Introduction

In the past few decades information and communication technologies have transformed every aspect of human endeavour; mobile technologies, being the most rapidly adopted technologies in human history, have fundamentally changed the way we work, learn, travel, consume and communicate with each other.[1] Connected devices bundle multiple functionalities, which were hitherto performed by various independent gadgets, in integrated, multi-component devices. For such devices to operate and communicate seamlessly with each other, common interfaces and technical specifications are required. The structure of the present article is the following: in Sect. 2, the historical course of standardization in wireless telecommunications will be briefly outlined; in Sect. 3, the efficient and inclusive nature of the standard-setting process and its tangible benefits to consumer welfare will be discussed; in Sect. 4, the standardsetting process will be analyzed as a fundamentally disruptive process; Sect. 5 discusses EU competition policy on collaborative standardization; and Sect. 6 presents the conclusions of this paper

Standardization in the Mobile Telecommunications Sector
Performance-Driven Standardization and Innovation
Robust Competition in All Relevant Markets
The Standard-Setting Process and Disruptive Innovation
Anticompetitive Risks and Private Ordering in Collaborative Standardization
Implications of Huawei
Findings
Conclusion
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