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In the interest of cross vendor compatibility, the method by which different technologies interoperate is often standardized. This means that a non binding agreement is made between multiple parties to abide by rules set forth in a documented standard.

Examples of this include The USB Device Working Group, Jedec, The C++ Standards Committee, and PCI-SIG.

While presumably in the public's interest, these groups appear to be a fragrant violation of antitrust laws. Do they require a special license to operate?

If so, what would such a license look like and what agency would issue it?

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Standards-setting by industry groups is not inherently anti-competitive and these groups do not require a licence from the government to operate. They are a prototypical example of "private ordering" (see David J. Teece & Edward F. Sherry, "Standards Setting and Antitrust" (2003) 87 Minn. L.R. 1913, p. 1987).

What can be anti-competitive is when a corporation advocates for an element to be included in a standard for reasons other than technical considerations. See e.g. the International Standards Organization's "Competition Law Guidelines."

An example violation is the behaviour of Rambus, Inc.:

According to the FTC complaint, Rambus nonetheless participated in JEDEC’s DRAM standard-setting activities for more than four years without disclosing to JEDEC or its members that it was actively working to develop, and possessed, a patent and several pending patent applications that involved specific technologies ultimately adopted in the standards.

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In its liability opinion dated July 31, 2006, the Commission found that, “Rambus engaged in exclusionary conduct that significantly contributed to its acquisition of monopoly power in four related markets.”

In another example, Dell Computer Corporation was alleged to have

voted to approve the VL-bus standard and certified that the standard did not infringe its intellectual property. After the standard became very successful, Dell asserted an earlier-issued patent against several computer manufacturers using the standard.

The FTC entered a consent agreement with Dell:

prohibiting Dell from enforcing its patent against those who wanted to use the VL-bus standard. The FTC's order also prohibited Dell from enforcing patent rights in the future when it intentionally failed to disclose those rights upon request of a standards-setting organization.

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  • I would argue that creating standards is pro competitive, as having one standard to regulate... pipe fittings allows companies to easier compete as their pipes are known to fit to any other pipe under the same standard - and puts them into competition for prices.
    – Trish
    Commented Aug 7, 2023 at 6:40

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