Germany Approves Carmakers’ Wireless Tech Alliance

Germany’s antitrust authority has given the green light to a strategic alliance between three major car manufacturers and industrial giant thyssenkrupp to jointly purchase wireless technology licenses. This development, reported by Reuters, marks a significant step towards enhancing 4G and 5G data transmission capabilities in the automotive industry.

The German Cartel Office announced on Monday that BMW, Mercedes-Benz, Volkswagen (VW), and thyssenkrupp have received approval to form the “Automotive Licensing Negotiation Group.” This coalition aims to streamline the acquisition of thousands of patents essential for advancing wireless communication technologies in vehicles.

“The automotive industry needs to secure licenses on numerous patents to bolster 4G and 5G wireless data transmission in cars,” the Cartel Office in Germany stated. The regulatory body emphasized that existing competition rules permit multiple patent holders to bundle their rights and license them collectively to set wireless standards. This approval introduces a new dimension to competition law by allowing licensees to pool their deals on standard essential patents (SEPs).

In a groundbreaking move, the regulator specified conditions to prevent anti-competitive practices. Participation in joint negotiations must remain voluntary and open to all automotive industry suppliers. Furthermore, information exchange within the alliance must be restricted to the “absolute minimum necessary” to ensure fair competition.

“Our examination focuses for the first time on cooperation on the licensees’ side, breaking new ground in competition law. This development is significant far beyond Germany,” the Cartel Office remarked.

The approval comes with the caveat that the alliance should not leverage unfairly large buying power. This condition is crucial, as industries beyond the automotive sector also invest in mobile communications technologies. As long as the group refrains from influencing automotive-specific technology standards, the alliance is deemed fair.

Forming such a coalition is a delicate endeavor for the automotive sector, which is currently undergoing a transformative phase towards self-driving cars, reduced emissions and electric vehicles. The joint effort to set new technology standards must navigate these changes carefully to avoid stifling innovation and competition.

Source: Reuters