EU Commissioner for Competition Speaks on Technology and Open Standards

Photo: Neelie Kroes, the EU's European Commissioner for Competition. (copyright ©2008 European Community)

Neelie Kroes, the EU's European Commissioner for Competition, in a video on her Web site, says competition keeps business people awake, and gives consumers the best quality and lowest price. "I am the referee," said Kroes.

In a breakfast speech yesterday morning, Kroes addressed competition in the technology sector, and what she called simplistic answers to a number of issues regarding proprietary vs. open standards.

"We need an approach to standards that is based on evidence, on economics and on experience," she said.

"It is simplistic to assume that because some intellectual property protection is good, that such protection should therefore be absolute in all circumstances. It is simplistic to assume that because standardization sometimes brings benefits, more standardization will bring more benefits. It is simplistic to assume that if the best approach is sometimes to base a standard on proprietary technology, then that is always the best approach. And it is simplistic to assume that we can fix on a standard today, without paying attention to the risk of being locked-in tomorrow."

Kroes went on to outline what that means in practical terms.

"First, we should only standardize when there are demonstrable benefits, and we should not rush to standardize on a particular technology too early," she explained. "Second, I fail to see the interest of customers in including proprietary technology in standards when there are no clear and demonstrable benefits over non-proprietary alternatives. Third, standardization agreements should be based on the merits of the technologies involved. Allowing companies to sit around a table and agree [on] technical developments for their industry is not something that the competition rules would usually allow. So when it is allowed we have to look carefully at how it is done.

"If voting in the standard-setting context is influenced less by the technical merits of
the technology but rather by side agreements, inducements, package deals,
reciprocal agreements, or commercial pressure ... then these risk falling foul of the
competition rules."