The Pebble and the Avalanche

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Current Revolutions in Business and Technology

by Dr. Moshe Yudkowsky,

author of The Pebble and The Avalanche: How Taking Things Apart Creates Revolutions

 

Fri, 2006-Aug-04, 14:00

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FTC Penalty for Abuse of Standards

The U.S. Federal Trade Commission just slammed Rambus with a penalty:

The FTC unanimously ruled that Rambus violated antitrust laws when it failed to tell memory chip makers that it had applied for patents on technologies for speeding up memory chips that the industry had chosen to use in everything from personal computers to set-top boxes.
The case seems to be quite complex, and the FTC commissioners unaminously reversed the ruling of an administrative judge when they issued the penalty. I've heard of this case on and off for years, and I didn't realize that Rambus continued to fight it.

Given the recent spat at the IEEE over allegations of fraud in the standards-setting process, it's easy to be cynical about standards. But let's look at the flip side: standards have become so important that fraud has become worthwhile. In the case of Rambus, the FTC found that Rambus fraudulently slipped their patented technology into the standard, knowing that later they could extract royalties. In the case of the IEEE, the goal is allegedly to prevent the adoption of a standard that would wipe out proprietary technology. As the complextity of technology increases, the importance of standards also increases.

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