Context:
- Last fall, deputy U.S. antitrust chief Dina Kallay said at a European hybrid conference said that the European Commission’s (EC) comfort letter to an Automotive Licensing Negotiation Group (ALNG) was “concerning and unusual” as well as irreconcilable with competition law (October 10, 2025 ip fray article). A similar comfort letter had previously been issued by the German Bundeskartellamt (Federal Cartel Office) based on the same obviously overbroad market definition (June 10, 2024 ip fray article).
- The EC’s Directorate-General for Competition (DG COMP) is presently working on a revision of its Technology Transfer Guidelines (TTG), potentially enshrining the reasoning of its comfort letter in soft law (September 11, 2025 ip fray article).
- The Trump Administration does not take this matter lightly. Just a few hours prior to this article, we wrote that a recent speech by United States Patent and Trademark Office (USPTO) Director John A. Squires had “foreign trade implications for those pushing for Licensing Negotiation Groups in the EU.”
What’s new: MLex has now reported that the Antitrust Division of the United States Department of Justice (USDOJ or DOJ) has sent Civil Investigative Demands (CIDs) to the ALNG’s members (automakers BMW, Mercedes, and Volkswagen, as well as industrial conglomerate Thyssenkrupp). This is a Sherman Act § 1 (i.e., cartel) investigation, MLex reporter Khushita Vasant mentioned on LinkedIn.
Direct impact:
- CIDs are serious information requests that must be complied with. Not every time that a CID issues, further action is taken. But unless the answer to a CID satisfactorily addresses the competition concerns that gave rise to it, the next step is a governmental antitrust lawsuit in U.S. federal court.
- It only takes a single major jurisdiction to oppose the ALNG. It can only fly if it has clearance in all major jurisdictions.
- The members of the ALNG now have to ask themselves whether it may be better to disband. As discussed below, the ALNG now faces an uncertain future because its members may choose to minimize their risk exposure.
- Even if the ALNG’s members (all or most of them) stand by the project, the U.S. antitrust investigation will make it harder for them to convince other companies to join.
- In practical terms, a federal lawsuit by the Trump Administration would pose serious risks to the ALNG and its members for several years to come (two to three years in district followed by an appeal). Even if Democrats won the next election and (which is an even bigger question mark) viewed the ALNG more favorably, a lawsuit would likely continue. The next key juncture for automotive SEP licensing will be the transition to 6G in 2030 and the following years. If the DOJ investigates for a year or two and then files suit, the ALNG would be unlikely to be able to negotiate with SEP holders at the point where those would take 6G licenses from Avanci as well as bilaterally.
Wider ramifications:
- Automakers have every right to prefer lower standard-essential patent (SEP) royalties. But for an industry with a rich history of cartel law violations, the ALNG is a rather daring approach.
- It is a false equivalency to believe that patent pools and LNGs are two sides of the same equation. SEPs are, by definition, purely complementary. Even if a single pool offered a license to 100% of all cellular SEPs, the alternative would be a multiplicity of bilateral license agreements. Bilateral SEP license deals have indeed been struck in the automotive on various occasions. For example, Avanci licensor Nokia announced its fifth bilateral license deal with a Chinese automaker earlier this year (January 20, 2026 ip fray article).
- The EU is not legally bound by any U.S. decision, not even a final non-appealable U.S. court ruling and much less a preliminary investigation that will not necessarily lead to litigation. But it has politicized antitrust law by adopting a market definition (as the German competition authority did before it) that is belied by the fundamentally different ways in which SEPs are licensed and used in the automotive sector as compared to, for example, smartphones or simple asset trackers. Within the automotive industry, the ALNG is clearly above the de minimis threshold (15% in the EU) for buyers’ cartels.
The ALNG may not have formally incorporated yet, but its members can’t deny that they have been pursuing these plans.
Industry rumor has it that Volkswagen is more committed to the project than its partners, and there have previously been cases in which an automaker (such as Mercedes in a recent high-stakes matter) acted as a whistleblower, throwing the other car makers under the bus.
The potential consequences of a U.S. cartel law violation far exceed the hypothetical gains from the ALNG. The internal decision-making processes will likely change now, at least at some of the member companies. As opposed to the patent departments pursuing their own agenda, each company’s general counsel will have to accept responsibility and ask questions from the top brass, even the CEO. The internal risk assessment will be performed by automakers’ antitrust departments, and they have plenty of experience. Burned child dreads the fire.
In order to convince company leadership to stand by the ALNG, IP executives will have to show that substantial savings could result from it. They will not even be asked about the risk. That analysis will be performed by others. By people who will not want their careers to die on that hill.