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MEMO /09/273

Brussels, 12 June 2009

Antitrust: Commission market tests commitments proposed by Rambus concerning memory chips

The European Commission has invited comments from interested parties on commitments offered by microchip designer Rambus to meet concerns that it may have infringed EC Treaty rules on abuse of a dominant position (Article 82) by claiming unreasonable royalties for the use of certain patents for “Dynamic Random Access Memory” chips (DRAMS) (see MEMO/07/330 ). Rambus in particular is prepared to commit to put a cap on its royalty rates for the five year duration of these commitments. The cap includes a "Most-Favoured-Customer" clause which would ensure any future rate reductions would benefit the whole market. Interested parties can submit comments within one month from the date of publication. Following the market test, the Commission may decide to adopt a decision under Article 9 (1) of Regulation 1/2003, making the commitments legally binding on Rambus.

On 30 July 2007, the European Commission adopted a Statement of Objections against Rambus, a company incorporated in Delaware, USA. This outlined the Commission’s preliminary view that Rambus may have infringed Article 82 of the EC Treaty by abusing a dominant position in the market for Dynamic Random Access Memory (DRAMs). DRAMs are used to temporarily store data in products such as PCs.

JEDEC, an industry-wide standard setting organisation, developed an industry standard for DRAMs. JEDEC-compliant DRAMs represent around 95% of the market and are used in virtually all PCs. Worldwide sales of DRAM chips in 2008 exceeded 34 billion US Dollars. Rambus claims its patents cover technologies included in these JEDEC standards and is asserting these against manufacturers of DRAMS that comply with the JEDEC standard.

The Commission’s preliminary view, set out in the Statement of Objections, was that Rambus engaged in intentional deceptive conduct in the context of the standard-setting process, for example by not disclosing the existence of the patents and patent applications which it later claimed were relevant to the adopted standard. Against this background, the Commission's provisional view, as outlined in the Statement of Objections, was that Rambus was abusing its dominant position by claiming unreasonable royalties for the use of its patents against the JEDEC-compliant DRAM manufacturers at a level which, absent its conduct, it would not have been able to charge.

Following the Statement of Objections, Rambus proposed commitments to address the Commission's concerns. In particular, Rambus commits during five-years to put a cap on its royalty rates for products compliant with the JEDEC standards.

The Commission considers that 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. Standards bodies should be encouraged to design clear rules respecting these principles. However, in a specific case where there appear to be competition concerns, the Commission will investigate and intervene as appropriate.

As required by Article 27 (4) of Regulation 1/2003, a so-called " market test notice" with a summary of the proposed commitments has been published in the EU's Official Journal on 12 June 2009. The full version of the commitments is available on the Commission's website at: .

Interested parties are invited to present their comments within one month of the publication in Official Journal .

Under Article 9 of Regulation 1/2003, the Commission may decide to make the commitments legally binding on Rambus. Such an Article 9 decision would find that there are no longer grounds for action by the Commission, without concluding whether or not there has been or still is an infringement of EC antitrust rules.

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