Legal requirements to develop a Standard

The activity where competing or potentially competing companies in a market sector worked jointly to develop a standard is subject to the requirements of competition law. It is therefore important that the participants are aware of those requirements and abide by them. The requirements are as follows:

  1. Standardisation should only be undertaken where it enhances competition, e.g., by developing new markets, improving supply, lowering prices or improving quality, innovation and technical development;
  2. Standards must not limit future innovation nor lead to the obsolescence of existing products;
  3. Participants should consider whether standardisation is really necessary; only those elements that need to be standardised should be;
  4. The rules of any standard-setting organisation should contain sufficient safeguards to prevent the standard-setting process from being biased towards any one participant. The standard-setting process must be transparent;
  5. All competitors in the market(s) affected by the standard should be able to participate in the standard-setting initiative;
  6. The standard-setting initiative must not have an anti-competitive aim nor become a forum for exchanging information, price-fixing or market-sharing. It must not exclude other operators from the market. The standard-setting initiative should have a competition compliance procedure, including clear guidelines as to what can and cannot be discussed;
  7. The standard must be set on a non-discriminatory basis; ideally be technology neutral; and it must be objectively justifiable why one standard is chosen over another;
  8. There must be no obligation to comply with the standard and participants in any standard-setting initiative must be free to produce other new products that do not conform with the agreed standard as well as to develop alternative standards;
  9. The information needed to apply the standard must be available to those wishing to enter the relevant market;
  10. The standard must remain as open as possible and be applied in a clear, non-discriminatory manner. Access must be possible for third parties on FRAND terms, including by providing a fair and balanced intellectual property policy;
  11. If any standard developed includes substitute technologies (i.e., technology that is regarded by users/licensees as interchangeable with or substitutable for another technology), restrictive effects on competition are more likely to arise;
  12. There must be a clear distinction between standard-setting and related R&D/commercial exploitation. The latter will also have competition implications and participants should check the position with their own legal advisors;
  13. Any standard-setting organisation should have an intellectual property policy dictating how any IPRs are to be dealt with in formulating the standard, including a policy regulating disclosure by participants of IPR essential to the standard;
  14. A participant in any standard-setting activity that has an IPR that could be essential to the standard should consider whether it wants its IPR included and on what licensing terms. Any intellectual property policy should be followed and fellow participants should be made aware of the fact that the participant’s intellectual property is likely to be essential;
  15. If a company is aware that another participant has essential IPR but is not planning to disclose this, it should inform any standard-setting organisation.