Motorola abused its dominant position by filing patent-related injunction requests against Apple, according to the European Commission.
The EU on Monday said it has informed Motorola that in its "preliminary view," the Google-owned company did not try to negotiate royalty payments on fair, reasonable, and non-discriminatory (FRAND) basis.
The commission has sent Motorola a statement of objection, which is a formal step in EU investigations. Motorola now has a chance to respond and request an oral hearing. After considering all the evidence, the commission could ban Motorola from the conduct of which it is accused or impose a fine of up to 10 per cent of a company's annual worldwide turnover.
"The protection of intellectual property is a cornerstone of innovation and growth. But so is competition. I think that companies should spend their time innovating and competing on the merits of the products they offer – not misusing their intellectual property rights to hold up competitors to the detriment of innovation and consumer choice," Joaquín Almunia, the commission vice president in charge of competition policy, said in a statement.
The announcement comes one year after the EU formally opened a patent abuse investigation into Motorola. The investigation was prompted by complaints from Apple and Microsoft, which accused Motorola of suing over "essential" patents rather than trying to work out licensing deals.
The EU investigated whether Motorola's efforts to get devices like the iPhone and iPad (as well as Windows and the Xbox in its fight with Microsoft) pulled from store shelves over patent disputes meant the company has "failed to honor its irrevocable commitments made to standard setting organizations."
At issue is something known as FRAND licensing obligations, which are intended to keep major corporations in check and avoid abusive patent-related behaviour. Basically, if a company holds a patent on a technology that is essential to a particular industry, they should make every effort to license that technology, even to major rivals.
Motorola claims that it has proposed fair royalty payments to companies like Apple and Microsoft, but those firms beg to differ and have accused Motorola of demanding exorbitantly high rates, prompting lawsuits.
"We agree with the European Commission that injunctions should only be sought against unwilling licensees and, in this case, Motorola Mobility followed the procedure established in the German Supreme Court's Orange Book ruling," Katie Dove, a Motorola Mobility spokeswoman, said in a statement. "Apple had to make six offers before the court recognized them as a willing licensee."