The German competition authority, Bundeskartellamt, has given the green light for the formation of the Automotive Licensing Negotiation Group (ALNG) by major automotive companies like BMW, Mercedes-Benz, Thyssenkrupp, and VW. The purpose of this cooperation is to jointly negotiate terms for acquiring licenses for standard essential patents (SEPs), which are crucial for technologies like 4G and 5G used in smartphones and cars.

The Bundeskartellamt's approval is subject to certain conditions, including that the cooperation must focus on non-automotive-specific standards, ensure voluntary participation in negotiations, and allow open access to automotive industry suppliers. The exchange of information among members is restricted to what is essential.

The examination by the Bundeskartellamt concentrated on the impact of the ALNG on licensing markets and automotive markets. While the cooperation's combined market share on the demand side for mobile communications SEPs remains below 15%, it may exceed this threshold in specific automotive markets. However, the authority found that the risk of coordination between ALNG members is low due to the minimal impact of SEP licensing costs on vehicle production costs.

Additional conditions for the ALNG's operation include the requirement for voluntary negotiation with licensors, openness to automotive industry suppliers, and measures to prevent the exchange of competitively sensitive information beyond what is necessary. Any plans to expand activities to more automotive-specific technologies must be notified to the Bundeskartellamt.

Standard essential patents (SEPs) are crucial for implementing standards like 4G, 5G, Wi-Fi, or H.265 in products such as smartphones and vehicles. Licensing these SEPs under fair, reasonable, and non-discriminatory (FRAND) terms is a common requirement. The global market for mobile communications SEPs alone is valued in the tens of billions of euros.

The establishment of Licensing Negotiation Groups (LNG) like the ALNG is a relatively new development. While ALNG members argue that cooperation can streamline negotiations and reduce costs, concerns have been raised by licensors about potential shifts in negotiation power balance.