Everyone and their brother knows the Obama administration has overturned a Samsung-inspired ITC ban on US imports of some Apple [AAPL] products — but if you read the administration's message, I suspect there could be far more trouble in store for the Korean company as competition regulators look at how it does business.
Friend's of FRAND
It's all in the administration's response to Samsung's attempt to usurp the meaning of FRAND patents. Is it appropriate that the company has refused to follow the spirit of such patents in order to harm the interests of its biggest competitor?
This isn't a David and Goliath struggle, or, if it is, it is Apple that is David and Samsung the giant. Apple was once the 500-pound gorilla in the smartphone room, boasting the world's most modern mobile OS and the largest slice of that side of the market.
That was yesterday.
Look at the nature of the mobile industry today and it's clear that Apple doesn't dominate the sector, Samsung does. Further, in pursuit of that dominance, Samsung seems ready to do anything.
Here's a few reasons one might think that:
- In the US Samsung has been convicted of infringing Apple patents in its early generation Galaxy products (as it has in other territories).
- Samsung holds a range of patents essential to industry standards that it seemingly has not been prepared to negotiate under terms of FRANDagreements. (NB: Samsung withdrew such attempts in Europe when regulators threatened to intervene because the EU felt such behaviour to be anti-competitive).
- Samsung has also blatantly attacked Apple and its users within its media ads.
- The Korean firm is known to have paid people to post negative commentsagainst its competitors on sundry Websites.
- Samsung recently admitted developers were offered cash to mention its developer competition on a developer community website.
- It has recently been revealed Samsung has undermined benchmark tests in order to give its products better results.
- Samsung has also advertised products as water-resistant, even while refusing to offer a guarantee on their use in this way.
Dominance — what cost?
What does this mean?
It means the world's dominant mobile phone manufacturer is engaged in a series of direct attacks against its strongest competitor, even while manufacturing components for the devices Apple brings to the market.
I'm no expert, but so far as I can tell we have a clear picture here in which a market dominant company is using every tool at its disposal to undermine the success of its biggest competitor.
A competitive market requires checks and balances. Fair competition is good for consumers — unfair competition is not. Unfair competition could by some be epitomised by what appears to have been a refusal on behalf of Samsung to reach an impartial deal with Apple of SERP/FRAND patents. Unfair competition could also include blatant design imitation, provision of misleading consumer promises.
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