The European Commission has released an informal guidance letter to support the formation of the Automotive Licensing Negotiation Group (ALNG), which will negotiate licenses for technologies protected by standard essential patents (SEPs) in the automotive sector. This initiative is part of the Commission's broader strategy to enhance the competitiveness of the EU automotive industry, as outlined in the Industrial Action Plan for the sector.

This guidance coincides with another letter directed at APM Terminals regarding joint purchasing agreements for container-handling equipment. These letters mark the first guidance issued under the 2022 Notice on Informal Guidance, which allows businesses to seek informal advice on EU competition rules for novel or unresolved issues.

The Commission has determined that the ALNG does not violate Article 101 of the Treaty on the Functioning of the European Union (TFEU) if certain conditions are met. These include ensuring that the combined market share of ALNG members does not exceed 15% and that participation in the group is voluntary for SEP holders. Additionally, information exchanges among members are limited to what is necessary for negotiations.

Upon assessing the ALNG's compliance with Article 101 TFEU, the Commission concluded that it does not restrict competition by object and is unlikely to have significant negative effects on competition. The ALNG's market share is expected to remain below the threshold, and the cost of licensing SEPs is a minor component of overall product costs, reducing the likelihood of competitive harm.

The ALNG is also expected to enhance efficiency in licensing SEPs related to digital technologies, contributing to the EU's decarbonization goals and the transition to net-zero emissions by 2050, as part of the Clean Industrial Deal.

Standard essential patents are crucial for implementing specific standards in products, and SEP holders must offer licenses under fair and non-discriminatory terms. The Commission's guidance aims to clarify the application of competition law to these new licensing negotiation groups, which share similarities with joint purchasing arrangements but focus on intellectual property rights.