European Regulatory Framework Boosts China Telecom

European Commission’s Regulatory Framework Could Boost China’s Dominance in Telecom Industry

By The Fatty Fish Editorial Team - April 30, 2023

The European Union (EU) is set to introduce a new regulatory framework that could significantly impact the mobile telecommunications sector. The proposed regime applies to standard essential patents (SEPs) and aims to address concerns surrounding fair and reasonable access to essential technologies. SEPs are deemed essential to implementing a specific technical standard. In the mobile telecommunications sector, SEPs cover various technologies, such as the 5G and Internet of Things (IoT) standards. The licensing of these patents is crucial for ensuring interoperability and fostering innovation.

The EU’s new regulations seek to address concerns regarding the licensing of SEPs. They aim to ensure fair and nondiscriminatory access to these essential patents, preventing the abuse of market power by patent holders. The proposed rules will require patent holders to license their SEPs under reasonable and predictable terms, eliminating the potential for excessive licensing fees or unfair licensing conditions. This proposed regulatory regime is unbalanced in favoring implementers over innovators, and thus it threatens to limit the technological and economic growth in the mobile telecommunications sector.

As the EU prepares to roll out its new regulatory framework for SEPs, the mobile telecommunications sector awaits its impact. The long-term consequences of these regulations remain uncertain, with potential implications for patent holders, technology companies, and consumers alike. Here is an opinion piece we found of interest regarding how recent European Commission (EC) decisions in the telecom sector benefit China and will hurt Western innovation.

European Commission Undermines Western Innovators, Boosts Chinese Dominance of Telecom Sector

In an opinion piece for the Daily Signal, “European Commission Undermines Western Innovators, Boosts Chinese Dominance of Telecom Sector,” Tom Duesterberg, senior fellow at the Hudson Institute, and Adam Mossoff, visiting fellow in intellectual property at the Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation, professor of law at the Antonin Scalia Law School of George Mason University, and senior fellow at the Hudson Institute, discuss recent decisions made by the EC in the telecom sector that are raising significant concerns among experts and industry players. They argue that these decisions not only undermine Western innovators but also inadvertently bolster Chinese dominance in the global telecommunications industry. According to the authors, such developments could have far-reaching consequences for Western technological leadership and the balance of power in the industry.

They believe the measures the EC has adopted inadvertently favor Chinese telecommunications companies, particularly in the realm of 5G infrastructure. These policies have sparked a wave of concerns about the long-term implications for Western innovation and security.

One example they provide is the EC’s decision to adopt policies that limit the extent to which Western companies can participate in the development and deployment of 5G networks. Critics argue that these policies, intended to create a level playing field, have unintentionally tipped the scales in favor of Chinese companies such as Huawei and ZTE. As a result, Chinese companies have been able to gain a stronger foothold in the European market, potentially leading to increased dependence on Chinese technology and jeopardizing Western competitiveness. Read the full article on the Daily Signal.

Disclosure: Fatty Fish is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

The Fatty Fish Editorial Team

The Fatty Fish Editorial Team includes a diverse group of industry analysts, researchers, and advisors who spend most of their days diving into the most important topics impacting the future of the technology sector. Our team focuses on the potential impact of tech-related IP policy, legislation, regulation, and litigation, along with critical global and geostrategic trends — and delivers content that makes it easier for journalists, lobbyists, and policy makers to understand these issues.