EC Agrees to Close DRAM Antitrust Case Against Rambus

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Europe's top antitrust regulator agreed to end its investigation of memory chip maker Rambus Wednesday, after the firm agreed to change the way it licenses its industry-standard technology.

The settlement lays down antitrust markers for technology companies whose inventions are recognized as industry-wide technologies.

And it could have a bearing on how the European Commission deals with the controversial decision by the international standards body ISO to recognize Microsoft's OOXML document format, according to some observers.

The Commission accused Rambus of charging abusive royalties for the use of some of its patents for dynamic random access memory (DRAM) chips.

Rambus agreed to settle the case in June, and after five months' deliberation the regulator concluded Wednesday that the offer would bring to an end the monopoly abuse.

Rambus promised to put a worldwide cap on its royalty rates for its products that comply with JEDEC industry standards for five years, during which time it would waive all royalties for its SDR and DDR chip standards. It also agreed to reduce royalty rates for more recent DDR2 and DDR3 DRAM to 1.5 percent from 3.5 percent during this period.

The U.S.-based standard-setting organization JEDEC developed an industry-wide standard for DRAM. JEDEC-compliant DRAM is used in virtually all PCs. Last year global sales of DRAM totaled $34 billion.

The Commission believed Rambus had intentionally concealed that it had patents and patent applications connected to DRAM chips that were relevant to technology used in the JEDEC standard, and that it claimed royalties for those patents when they should have been offered free – a practice known as patent ambushing.

Announcing the Commission decision, competition commissioner Neelie Kroes said it is vital to stop what she called "abusive practices in standard setting," adding that Rambus' behavior was harmful to innovation and led to higher prices for companies and consumers.

"The Commission will vigorously enforce the competition rules in this area, for the benefit of technical progress and European consumers," she said.

"An effective standard-setting process should take place in a non-discriminatory, open and transparent way to ensure competition on the merits and to allow consumers to benefit from technical development and innovation," Kroes added.

The Commission is in the process of settling a much bigger antitrust case against Microsoft. A final decision to accept the software giant's settlement offer is expected next Tuesday.

In addition to creating a level playing field for competition among Internet browsers, Microsoft is understood to have also made promises not to unfairly withhold information from companies that want to make products compatible with the word processing, spreadsheet and office management tools contained in Microsoft's Office suite of software applications.

As part of this probe the Commission was examining whether OOXML is sufficiently interoperable with competitors' products, and in April last year, when OOXML won ISO status, the regulator suspected foul play.

Microsoft was suspected of having unfairly influenced the vote by national ISO affiliates in order to secure the ISO label on OOXML.

It is unclear how the anticipated settlement announcement of the Microsoft case next week will deal with the questions surrounding OOXML. "Microsoft's settlement offer in the interoperability case has addressed the main concerns other companies had, but I don't know how this specific issue has been settled," said one person familiar with the Commission's thinking who asked not to be named.

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