EU probes Samsung, Germany blocks its tablets

January 31, 2012 - 7:55 PM
Germany Samsung Apple

FILE - In this Aug. 25, 2011 file photo a lawyer holds an Apple iPad and a Samsung Tablet-PC at a court in Duesseldorf, Germany. The Duesseldorf state court ruled Tuesday, Jan. 31, 2012, that neither the South Korean company's Galaxy Tab 10.1 nor the Galaxy Tab 8.9 could be sold in Germany because they were in violation of unfair competition laws. A German appeals court has upheld a decision prohibiting Samsung Electronics Co. from selling two of its tablet computers in Germany, agreeing with Apple Inc. that they too closely resemble the iPad2. (AP Photo/dapd, Sascha Schuermann, file)

BRUSSELS (AP) — Samsung took a double-hit in its battle against archrival Apple when the European Union announced it would investigate whether it was illegally trying to hinder competitors and Germany blocked sales of some of its tablet computers.

Samsung Electronics and Apple Inc. are engaged in a strategic war over patents in many countries across the world as they try to draw market share away from each other.

The EU's antitrust watchdog thinks the South Korean company may be overstepping the bounds and launched a formal investigation into whether Samsung is using lawsuits over key patents on 3G wireless technology to hinder competitors — including Apple.

The European Commission, which is acting as the EU's antitrust enforcer, said Tuesday it suspected Samsung of not giving other companies fair access to patents it holds on standardized 3G technology for mobile devices — despite committing to do so in 1998.

A spokeswoman for the Commission said the probe also affected tablets such as Apple's newest iPad, which uses standardized wireless 3G technology.

The Commission said that Samsung last year sought legal injunctions against other device makers in several EU states, alleging patent infringement.

Under EU patent rules, a company that holds patents for standardized products is required to license them out indiscriminately at a fair price.

If Samsung is found guilty of unfairly restraining competition, it can be fined up to 10 percent of annual revenue related to the investigation.

"Samsung now has to think carefully about how it wants to deal with (the probe)," said Florian Mueller, a patent analyst who has been closely following the battle between Samsung and Apple.

In the EU, Samsung has sued Apple in Germany, France, Italy, the U.K., the Netherlands and Spain. It also has legal proceedings against its competitor in the U.S., South Korea, Japan and Australia, Mueller said. However, Mueller said, Samsung may now be inclined to withdraw its lawsuits against Apple following news of the European investigation.

The battle between the two companies began in April, when Cupertino, California-based Apple sued Samsung in the United States, alleging the product design, user interface and packaging of Samsung's Galaxy devices "slavishly copy" the iPhone and iPad.

Samsung — the global No. 1 in TVs and No. 2 in smartphones by sales — responded by filing its own lawsuits that accused Apple of patent infringement of its wireless telecommunications technology.

A spokesman said the European Commission launched its probe after its own investigation of the market, rather than reacting to complaints from Samsung's competitors. However, the Commission last year sent antitrust questionnaires to both Apple and Samsung.

The spokesman added that similar probes could also be launched against other companies strategically using patent lawsuits to stop competitors from selling similar devices.

Nam Ki-yung, a spokesman at Samsung Electronics in South Korea, said his company was looking at details of the news on the probe but had no immediate comments.

EU antitrust probes don't have a deadline and the Commission stressed that its investigation does not mean Samsung did indeed breach the bloc's competition rules. Samsung now gets the chance to respond to the Commission's concerns, as will other market participants.

Also Tuesday, in a separate case, an appeals court in Germany ruled in favor of Apple, saying Samsung could not sell its Galaxy Tab 10.1 nor the Galaxy Tab 8.9 in the country because they too closely resembled the iPad2, in violation of unfair competition laws.

"Samsung wrongly used the enormous reputation and prestige of the iPad," Duesseldorf state court Presiding Judge Wilhelm Berneke wrote in his ruling.

Samsung's successor tablet, the Galaxy Tab 10.1 N, was not affected by the ruling, and the company said that while the decision was disappointing, it was largely irrelevant.

"Today's ruling is of little factual relevance due to the new model Galaxy Tab 10.1 N, and ... the decision therefore is of no indicative value with respect to other legal proceedings involving the Galaxy Tab 10.1 N," Samsung said in an email to The Associated Press.

"Samsung will continue to take all appropriate measures, including legal action, to ensure continued consumer access to our innovative products."

Mueller concurred that the German court ruling won't have a commercial impact on the South Korean company, since it has already been selling a new model of the Galaxy tablet since November.

"The defeat in Germany is more of a symbolical nature," said Mueller, whose clients include Apple competitor Microsoft.

The probe and victory in the German court for Apple come after the California company has met with several setbacks recently in its fight with Samsung.

Most recently, a Dutch court ruled on Jan. 24 that Samsung's Galaxy Tab tablet was not a copy of Apple's iPad, and that it could continue to be sold in the Netherlands. That came on the heels of a December decision in Sydney, where the High Court dismissed Apple's appeal and said Samsung was free to sell its Galaxy tablet computers in Australia.

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Rising reported from Berlin; Hyung-jin Kim contributed to this story from Seoul.