Interim measures are back – Broadcom faces EC probe

01.07.2019

Key case law on the interface between competition law and IP rights emerged from the IMS Health case, some 16 years ago and the last occasion on which the Commission imposed an interim measures order in an Article 102 case. That case concerned the question of refusal to license IP rights, and the circumstances in which a dominant company could be obliged to grant access to third parties.

Last week, the Commission announced a new interim measures case against chip maker Broadcom. The request for interim measures is made at the same time as the issue of a statement of objections, which focuses on exclusivity agreements between Broadcom and its major customers (TV set-top box or modem manufacturers). The Commission press release also refers to the grant of rebates, product bundling, unidentified “abusive IP-related strategies” and deliberate degrading of interoperability between Broadcom and third party products. There seem to be shades of the case against Intel – another chip-maker in a different sector – here, as well as an interesting side-line in the sorts of questions seen in national authority investigations into coffee capsule manufacturers (Nespresso investigation by the French Competition Authority) or some rather venerable Commission decisions, such as Racal-Decca (concerning tactics used in radio transmission products to make it more difficult for competitors to interact with Racal-Decca’s equipment) as well as, more recently, Microsoft.

Competition authorities have repeatedly stated an intention to use make greater use of interim measures, often under political pressure (see, for example, the recent letter from Andrew Tyrie, Chairman of the CMA, to the Secretary of State).  And the dynamics of online platform markets are such that some are now calling for competition authorities to be bolder and less concerned about the risk of ‘false positives’. Given the duration of some Article 102 investigations, interim measures could – in principle – protect competitive processes that could have been irrevocably damaged by the end of the investigation. The Commission specifically refers in its press release to the risk of “elimination or marginalisation of competitors” before the end of the proceedings.

However, the burden on competition authorities to demonstrate that interim measures are appropriate remains high: for its case against Broadcom, the Commission will have to demonstrate that there is a “risk of serious and irreparable damage to competition”, such that “urgent” measures have to be taken.  When the Commission imposed interim measures against IMS Health, requiring it to give access to competitors to its copyright system for distribution to pharmacies in Germany, the Commission’s interim measures case foundered on the extent to which it was able to show a “reasonably strong prima facie case of infringement”. That wording came from Regulation 17 which has since been replaced by Regulation 1/2003, which does not include this particular formulation. However, it seems inevitable that the question of the likelihood of infringement being established will play a role in the balancing exercise to be conducted by the General Court, if Broadcom appeals against the imposition of interim measures.

So while interim measures remain a potentially powerful tool (and one which may encourage faster adoption of what the Commission considers to be appropriate remedies), the limited cases in which they have been deployed to date mean that, for now at least, they will continue to remain the rare exception rather than the rule.

Sophie Lawrance

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