The Supreme Court on Monday
announced it will not hear the Federal Trade Commission's case against
computer memory manufacturer Rambus Inc. (NASDAQ:RMBS),
a case the agency wanted to use to demonstrate how important it is for
companies to play fair when participating in standard-setting
organizations.
The FTC first sued Rambus in June 2002, claiming the
company manipulated the industry process that evaluated and selected a
universal method for random access memory. Joe Simons, a former head of
the FTC's Bureau of Competition, said at the time that the case would
send the message: "If you are going to take part in a standards process,
be mindful to abide by the ground rules and to participate in good
faith."
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But Rambus fought
back, winning before the FTC's own in-house judge, who actually
dismissed the case. The FTC itself, however, overturned the ALJ and
said Rambus' actions violated antitrust law.
Rambus then appealed to
the U.S. Court of Appeals for the District of Columbia Circuit, which
ruled that the FTC failed to prove the company had illegally
monopolized the market and wrote that the "Commission failed to demonstrate
that Rambus's conduct was exclusionary under settled principles of
antitrust law."
The Supreme Court's decision to deny the petition
for certiorari deals a blow to the agency's efforts to police the
standard-setting world. But organizations working on such matters
should have gotten the message they need to clearly state what is
expected of each participant and not leave such issues for competitors
to define on their own. - Cecile Kohrs Lindell in Washington
