U.S. streaming patent licensing company Access Advance offers 50 percent discounts to Chinese tech companies while charging full rates to American firms, undermining Trump administration efforts to address China’s intellectual property practices and unfair trade behavior.
Access Advance, a patent licensing company based in the United States, offers special discounts to China. This business practice contradicts the Trump Administration’s efforts to ensure American companies and consumers are treated fairly compared to their Chinese counterparts. A trade official in the Trump administration tells Breitbart News that he is “very concerned about American companies giving preferential treatment to China.”
Access Advance specifically licenses video codec technologies, a critical component of every online streaming and video platform. In January, they launched a license that covers four of the most recently developed video codecs. Codecs are components that encode or decode data streams, enabling consumers to stream video on their devices.
Access Advance licenses global technologies through patent pools at a 50 percent lower price in China than in America. A patent pool is a group of companies that share their patents for a specific technology so others can pay one fee to the pool to use all of their patents. For example, a Wi-Fi–connected device may need to use patents from dozens of companies. A patent pool enables the device manufacturer to efficiently clear most (if not all) patents at issue with one royalty payment, instead of negotiating with each company individually.
Over the last decade, Access Advance has given 50 percent discounts on licenses for Chinese products sold by the likes of sanctioned company SZ DJI Technology Co. and surveillance tech conglomerate Zhejiang Dahua Technology, relative to products using the exact same technology that are sold by American companies to American consumers. And now, in what appears to be a discriminatory tactic to catalyze interest in a new streaming service patent pool that it has been struggling to create, streaming industry sources say that Access Advance is offering a 50 percent discount for Chinese streaming platforms like ByteDance (owner of social media giant TikTok), Tencent (owner of WeChat) and Alibaba.
Cognizant that this would cause a backlash in the U.S., Access Advance carefully disguises its China discount. Access Advance’s website declares a “[r]oyalty reduction (50 percent discount)” when “the First Sale is in a country/territory in Region 2.” Access Advance defines Region 2 as “[a]llcountries/territories outside of Region 1.” Importantly, Region 1 includes the US, UK, Europe, Canada, Australia, and America’s Asian allies: South Korea, Japan, Taiwan, and Singapore – but not China.
Most American tech companies have difficulty competing in China. Many major streaming U.S. platforms, including YouTube, Instagram/Facebook, Netflix, and Snapchat, are completely banned in the Communist country. Even Apple and Amazon, which have large Chinese presences (a serious problem in itself), have not launched their streaming services in the country due to the censorship and restrictions they will face. Thus, a big discount for products and services sold in China is, in effect, a big discount for Chinese tech companies.
Breitbart News reached out to Access Advance for comment and received the following statement from company Peter Moller, the CEO of Access Advance: “It is accurate to say that Access Advance provides a 50 percent discount for sales in ‘Region 2 Countries.’ Those include many countries such as China, India, Vietnam, and Thailand.”
A U.S.-based licensing firm that grants Chinese tech giants a 50 percent discount that is unavailable to American tech companies runs counter to the Trump Administration’s “America First” trade policy with China. As Breitbart has recently reported, China’s IP theft of American companies costs the U.S. economy hundreds of billions of dollars a year. In President Trump’s first term, he called out “China’s policies, practices, and actions with regard to the forced transfers of American technology and the theft of American intellectual property,” noting that China’s IP practices “destroys American jobs.”
This term, the White House has emphasized that the tariffs against China are “in response to China’s intellectual property theft, forced technology transfer, and other unreasonable behavior.” So, while the Trump administration is trying to use economic pressure to reform China’s abuse of U.S. intellectual property, Access Advance is counteracting it by giving them a discount not afforded to America or its allies.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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