Calling all Policymakers: Bring Fairness Back to Europe

Simplification: at what cost?

The European Commission wants to cut red tape in the name of simplification. It is doing so through its ‘Omnibus’ packages.

The intention to withdraw the proposal for a regulation of standard essential patents (SEP Regulation) is a vote against fairness in Europe. It threatens the future of European technology, industry, and strategic autonomy.

The problem: a system that creates unfairness by design

Standard essential patents cover core wireless technologies – like Wi-Fi and 5G – that power Europe’s digital needs, including the internet of things (IoT). These patents must be licensed for businesses to create interoperable products. In theory, SEP holders have committed to offer licenses on fair, reasonable, and non-discriminatory (FRAND) terms.

In practice, many don’t. Instead, dominant patent holders – often from outside the EU – exploit the current faulty system to charge excessive fees, refuse licenses to certain businesses, and threaten costly litigation. The result? Higher costs, stifled innovation, and a digital economy controlled by a few powerful, mostly non-European, players.

Did you know?

The Commission estimates that there are just 30 companies who hold standard essential patents in the EU. By contrast, there are around 3 800 EU manufacturing firms implementing standards in the products they develop (Commission Impact Assessment, 2023).

The current SEP market is crying out for reform

The Commission claims it is withdrawing the proposal for an SEP Regulation in the name of simplification. However, the simple fact is that the current system is unpredictable, costly, and designed to favour those who already hold all the power.

The EU proposal for an SEP Regulation would change that by:

Bringing transparency to licensing, so businesses know what they are paying for.

The SEP is not an example of burdensome red tape. It is a necessary correction to a broken system that is already holding Europe back.

The cost of inaction: who pays the price?

Without regulation to redress the imbalances of the status quo, the damage will be felt across industries, from tech to healthcare to automotive. European society at large will ultimately pay the price:

European businesses will be at the mercy of patent holders demanding opaquely calculated fees. Companies could spend years – and fortunes – locked in legal battles just to access the technology they need. This could lead more companies to follow Swiss semiconductor manufacturer u-blox out of the IoT market.
Consumers will feel it in their wallets as businesses that are forced to pay inflated patent fees push the additional costs onto their customers.
Innovation in Europe will suffer. Startups and small businesses – the ones with the potential to lead the next wave of technological breakthroughs – will struggle to compete. Instead of launching in Europe, they’ll take their ideas elsewhere or simply give up.
Europe’s autonomy will be weakened further. From defence to healthcare to energy, almost all industries rely on connectivity. When European businesses can’t get fair access to the technology they need, we become dangerously more dependent on non-EU providers in sectors of strategic importance.

Bring fairness back to Europe: bring back the SEP Regulation

The intention to withdraw the SEP Regulation does not have to be final. There is still time to push back.

64 companies and industry associations have already taken up the cause by issuing the rallying call to the European Commission: don’t allow a policy-making chainsaw to threaten European digital competitiveness. Put the SEP Regulation back on the table and give European businesses a fair chance to compete, innovate, and lead the digital transformation.

Bring fairness back to Europe.

If you care about Europe’s future competitiveness, join us in petitioning the European decision makers.

Calling all Policymakers: Bring Fairness Back to Europe​