Key EU politician tells FOSS Patents: maps should fall under Digital Markets Act just like other search engines, license terms must be FRAND

This is a brief (but important) follow-up to the previous post (on car makers being oblivious to the relevance of the Digital Markets Act to their industry). After my podcast with a major automotive publication I reached out to Andreas Schwab MEP, the European Parliament's rapporteur on the DMA, to find out whether digital map services would fall under the groundbreaking legislation. Mr. Schwab found the podcast interesting and is proactively seeing to it that maps will fall squarely within the scope of the DMA:

[German original] "Es ist wichtig, darauf hinzuweisen, dass auch die Kartendienste der großen Digitalfirmen auf der Basis des DMA als Suchmaschinen gelten. Damit wird Art. 6(12) und die dort niedergelegten FRAND-Prinzipien auch für Karten gelten."

[my translation] "It is key to make it clear that the map services of the major digital companies will be deemed search engines under the DMA. As a result, Art. 6(12) and the FRAND principles set forth therein will also apply to maps."

There's no need to define FRAND on this blog: the term comes up all the time, not only but also in connection with standard-essential patents. Here's the language of Art. 6(12):

The gatekeeper shall apply fair, reasonable, and non-discriminatory general conditions of access for business users to its software application stores, online search engines and online social networking services listed in the designation decision pursuant to Article 3(9).

For that purpose, the gatekeeper shall publish general conditions of access, including an alternative dispute settlement mechanism.

The Commission shall assess whether the published general conditions of access comply with this paragraph.

While no politician played a more important role in this legislative process than Mr. Schwab, even he cannot single-handedly determine how the law will be interpreted. However, with the backing of a solid majority of the Parliament he is in a strong position to discuss these matters with the European Commission as it is working on its implementation guidelines and platform designations.

I agree that digital map services are essentially online search engines. From the outset, Google Maps was positioned as a natural and seamlessly-integrated extension of Google's search engine. For searches such as "nearby restaurants" one can simply switch between traditional search engine results pages and points of interest highlighted on a map.

It also makes sense in light of the DMA's objective, which is to ensure contestable digital markets. More so than other search engines, digital maps involve network effects, particularly with respect to real-time traffic data. A new map service would not have enough users to be able to quickly identify new congestions or to say whether a store is presently busy or empty. As a result, it would be deemed much less useful and would likely never reach the point at which it could compete with a service like Google Maps. That is the opposite of contestability.

Maps are not the only aspect of the DMA that is relevant to car makers, but they are one of the most relevant parts. For instance, if Apple and Google effectively took control over connected vehicles, they would send users to gas or charging station and collect a commission on the transaction they enable. In a worst-case scenario for car makers, they wouldn't get anything--or Apple and Google would collect an unreasonably high (supra-FRAND) share of the transaction value.

The previous post has been read by many people in recent days. I can only hope that the automotive industry will take the warning seriously, given how much is at stake not only for them but also for the wider economy and for consumers. It is time for car makers to engage. If they had been more foresightful, automakers would have been one of the most vocal groups in the legislative process on the DMA. The legislative process is over, but now is the time to ensure that this historic bill will be applied effectively and forcefully. And if all else fails, it would always be possible for the EU to update it. It may very well end up a work in progress given the fast-changing environment and gatekeepers' resourceful resilience. In order to treat maps as search engines it should not be necessary to amend the statute, however.

Share|

Nokia completes next stage of transformation into patent troll with sale of HERE to automotive consortium

Nokia has just made the following announcement:

"Nokia completes next stage of transformation with agreement to sell HERE to automotive industry consortium at an enterprise value of EUR 2.8 billion"

The buyers are Audi, BMW, and Daimler. I once did a consulting project, unrelated to this transaction and more generally about IP strategy, for one of them (I closed my consulting business about a year ago, however, in order to focus on app development). It's a really positive sign that these traditional industry players decided to join forces (they're on better terms with each other than major smartphone makers, but don't coalesce every day) and to outbid the likes of Uber.

All three of them--I know their products fairly well because I've repeatedly bought cars from two of them and driven long-term rental cars from the remaining one--have a lot of work to do to defend their turf against Silicon Valley companies like Tesla, Google, and Apple (AppleInsider's Mikey Campbell is a great source on that secretive project). It's ridiculous that, for example, Mercedes doesn't even provide its customers (I'm driving a 2014 S-Class) with frequent software updates the way Tesla does. And I've seen massive user experience deficiencies in the user interfaces of all three of them, including stuff of the kind that is as crazy as the removal of the Start button from Windows was but would presumably get people fired (or never even hired in the first place) at a company like Apple.

For example, the list of recent destinations of my car's navigation system, which has an ultrawide screen (two, actually, but I'm speaking of the one relevant to this problem here), often displays the city and even the county before the street, which means that the street name doesn't appear (for space constraints, even on an ultrawide screen) until I select a list entry. That just makes no sense in a country in which streets have fairly distinct names and one rarely has destinations with identical street names in two cities. Another example: the same button that can be used to select a phone number while using voice control will get the entire operation aborted if you hit it again in order to dial, though you would use that very button to dial without voice control. These examples show that a company like Daimler may understand wheels and brakes, but hasn't (yet) figured out screen layout and user interface design. Today's announcement is not the only indication of progress. The Mercedes F 015 is also very exciting.

With the F 015 being many years off, my next car will most likely be a Tesla, and I will definitely consider an Apple or Google car once available. Still I hope that those automotive companies, who have now demonstrated that they increasingly invest in digital technologies, will learn about user experience up to the CEO level, will change their development cycles and business model so they can deliver frequent and free updates to customers, will dump fossil fuels before customers dump their products, and and will do all of that in time before companies like Apple, Google and Tesla will, in a hypothetical worst-case scenario, turn them into the next Nokia.

Talking about the Nokia we know, I think the headline of this blog post is an accurate modification of the headline of today's Nokia press release: the "next stage of transformation" here relates to Nokia's trollification. By selling the HERE mapping business, Nokia has divested yet another product business. It was a licensing business, but a licensing business in which customers got something real and functional, as opposed to paying up for overbroad and often invalid (at least that's what German courts thought when Nokia sued HTC and ViewSonic a couple of years ago) patents.

Nokia's acquisition of Alcatel-Lucent has received regulatory clearance in the U.S. and Europe. Today's press release says the deal is expected to "close in the first half of 2016." It would be nice if this resulted in Nokia again focusing a bit more on actual products, but I'm very skeptical.

I guess it won't take long before numerous former Alcatel-Lucent patents show up in various lawsuits brought by patent assertion entities (PAEs). No company in the industry appears to be nearly as active and agressive in connection with privateering as Nokia. In May, Nokia and Ericsson sought to justify their privateering ways after IAM (Intellectual Asset Management) Magazine wrote about this topic, citing this blog.

Audi, BMW and Daimler will probably be among the targets of such patent assertions, given that cars are increasingly smartphones on wheels...

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|