us-federal-government antitrust-law
Are Technological Standards bodies required to be approved by the government?
<p>In the interest of cross vendor compatibility, the method by which different technologies interoperate is often standardized. This means that a non binding agreement is made between multiple parties to abide by rules set forth in a documented standard.</p>
<p>Examples of this include The USB Device Working Group, Jedec, The C++ Standards Committee, and PCI-SIG.</p>
<p>While presumably in the public's interest, these groups appear to be a fragrant violation of antitrust laws. Do they require a special license to operate?</p>
<p>If so, what would such a license look like and what agency would issue it?</p>

<p>Standards-setting by industry groups is not inherently anti-competitive and these groups do not require a licence from the government to operate. They are a prototypical example of &quot;private ordering&quot; (see David J. Teece &amp; Edward F. Sherry, &quot;Standards Setting and Antitrust&quot; (2003) <a href="https://core.ac.uk/download/pdf/217211884.pdf" rel="nofollow noreferrer">87 Minn. L.R. 1913</a>, p. 1987).</p>
<p>What can be anti-competitive is when a corporation advocates for an element to be included in a standard for reasons other than technical considerations. See e.g. the International Standards Organization's &quot;<a href="https://www.iso.org/files/live/sites/isoorg/files/developing_standards/docs/en/competition_law_guidelines.pdf" rel="nofollow noreferrer">Competition Law Guidelines</a>.&quot;</p>
<p>An example violation is <a href="https://www.ftc.gov/news-events/news/press-releases/2007/02/ftc-issues-final-opinion-order-rambus-matter" rel="nofollow noreferrer">the behaviour of Rambus, Inc.</a>:</p>
<blockquote>
<p>According to the FTC complaint, 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.</p>
<p>...</p>
<p>In its liability opinion dated July 31, 2006, the Commission found that, “Rambus engaged in exclusionary conduct that significantly contributed to its acquisition of monopoly power in four related markets.”</p>
</blockquote>
<p>In <a href="https://www.ftc.gov/news-events/news/speeches/antitrust-intellectual-property-law-adversaries-partners#a.%20Complaint%20allegations" rel="nofollow noreferrer">another example</a>, Dell Computer Corporation was alleged to have</p>
<blockquote>
<p>voted to approve the VL-bus standard and certified that the standard did not infringe its intellectual property. After the standard became very successful, Dell asserted an earlier-issued patent against several computer manufacturers using the standard.</p>
</blockquote>
<p>The FTC entered a consent agreement with Dell:</p>
<blockquote>
<p>prohibiting Dell from enforcing its patent against those who wanted to use the VL-bus standard. The FTC's order also prohibited Dell from enforcing patent rights in the future when it intentionally failed to disclose those rights upon request of a standards-setting organization.</p>
</blockquote>
