This article examines the respective market definition adopted by the German Federal Cartel Office (Bundeskartellamt) and the European Commission concerning the Automotive Licensing Negotiation Group (ALNG). Both authorities, in the specific context of the proposed ALNG set certain conditions for its operation to meet competition concerns. The respective market definition is derived from a substitutability analysis adapted from Joint Purchasing Agreements (JPAs). In addition, it relies on the identification of three relevant markets: 1) general mobile telecommunications standards; 2) automotive-specific standards; and 3) the final product market. The article argues that this analytical framework is flawed. First, the substitutability approach applicable to JPAs cannot be transposed to the licensing of Standard Essential Patents (SEPs). This is due to the distinct economic and legal characteristics of SEP licensing. Second, the licensing of SEPs is not substitutable across industries. And third, the relevant markets identified by the authorities are inapplicable and inconsistent with the new Technology Transfer Guidelines. The article concludes that the authority’s reasoning relies on a market definition that is disconnected from the realities of SEP licensing. This underscores the importance of a more economically grounded approach in future assessments.
This article examines the market definition adopted by the Bundeskartellamt and European Commission regarding the Automotive Licensing Negotiation Group. It argues that the analysis rests on an inappropriate transposition of the substitutability framework applicable to Joint Purchasing Agreements. Moreover, it rests on relevant markets that do not reflect the economic realities of Standard Essential Patent (SEP) licensing. In particular, the article questions the treatment of SEP licensing as cross-industry substitutable. It further questions reliance on technical criteria for automotive-specific standards and the inconsistent breadth of upstream and downstream markets. The finding suggests the need for an economically grounded approach reflecting SEP licensing practice.
