Rambus distorted market through deception, says FTC

US technology firm Rambus illegally monopolised the market for some kinds of memory chips by abusing a standards setting process, the US competition regulator has ruled. The Federal Trade Commission (FTC) has yet to decide on a penalty.

Rambus makes technology that goes into dynamic random access memory (DRAM) systems. The FTC says its behaviour held up the development of the DRAM industry, which used the Joint Electron Device Engineering Council (JEDEC) in the early days of DRAM development to decide how the technology should progress.

The FTC has said that it believes that Rambus misled the consortium in a manner which benefited the company at the expense of the industry and of competition. JEDEC was attempting to set the technical standards that would govern DRAM.

JEDEC "maintained a commitment to avoid, where possible, the incorporation of patented technologies into its published standards, or at a minimum to ensure that such technologies, if incorporated, will be available to be licensed on royalty-free or otherwise reasonable and non-discriminatory terms," said the FTC ruling.

Rambus, said the FTC, deceived the standards body. "Rambus nonetheless participated in JEDEC’s DRAM standard-setting activities for more than four years without disclosing to JEDEC or its members that it was actively working to develop, and possessed, a patent and several pending patent applications that involved specific technologies ultimately adopted in the standards," said an FTC statement.

"Rambus understood that knowledge of its evolving patent position would be material to JEDEC’s choices, and avoided disclosure for that very reason," said the ruling from the FTC. "Through its successful strategy, Rambus was able to conceal its patents and patent applications until after the standards were adopted and the market was locked in. Only then did Rambus reveal its patents – through patent infringement lawsuits against JEDEC members who practiced the standard."

The FTC will now hold further meetings to decide what penalty to apply. It said that the company will be liable for financial damages.

Rambus said in a conference call with analysts that it was likely to appeal the ruling.

The decision overturns a 2004 verdict by an FTC administrative law judge which said that the FTC had not proven its case.

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