Mobile Giants File Qualcomm EC Complaint

Online staff -- Electronic News, 10/28/2005

Broadcom, Ericsson, NEC, Nokia, Panasonic Mobile Communications and Texas Instruments have each filed complaints to the European Commission requesting that it investigate Qualcomm.

The mobile players are claiming Qualcomm’s conduct in the licensing of essential patents for 3G mobile technology is anti-competitive.

The companies allege that Qualcomm is violating EU competition law and failing to meet commitments made to international standard bodies that it would license its technology on “fair, reasonable and non-discriminatory terms.” Absent these commitments, the WCDMA 3G standard would not have been adopted, the companies believe.

"We believe Qualcomm has abused its licensing position in certain standards and has inhibited legitimate competition,” said Joe Hubach, general counsel for TI, in a group statement today. “If this conduct goes unchecked, the risk is that consumers in Europe and around the world will pay higher prices for mobile phones and services and have less access to innovative products."

Specifically, the six companies are claiming Qualcomm has tried to exclude competing manufacturers of chipsets for mobile phones from the market and prevent others from entering through acts ranging from the refusal to license essential patents to potential chipset competitors on fair, reasonable and non-discriminatory terms to offering lower royalty rates to handset customers that buy chipsets exclusively from Qualcomm. The group further claims Qualcomm charges royalties for its WCDMA essential patents that are excessive and disproportionate, “in particular by imposing the same royalty rate on WCDMA 3G handsets as it does for CDMA2000 3G handsets, despite the fact that Qualcomm has contributed far less technology to the WCDMA 3G standard than it has to the CDMA2000 standard.”

"Qualcomm committed to standard setting organizations that it would license its technology on fair, reasonable and non-discriminatory terms,” said Kasim Alfalahi, VP IPR licensing and patents, Ericsson AB. “In spite of this and in breach of competition law, Qualcomm is charging excessive and disproportionate royalties. This means ultimately that consumers may have to pay more than they should for their mobile handsets."

Qualcomm could not be reached for comment.