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EC investigates antitrust allegations vs. Qualcomm

Posted: 03 Oct 2007 ?? ?Print Version ?Bookmark and Share

Keywords:chipset? 3G? W-CDMA? standard setting?

The European Commission (EC) has decided to open formal antitrust proceedings against U.S. chipset manufacturer Qualcomm Inc., over allegations that the company's licensing terms and conditions are not fair, reasonable and non-discriminatory (FRAND) and, therefore, may breach EC competition rules.

Qualcomm is a holder of intellectual property (IP) rights in the CDMA and W-CDMA standards for mobile telephone. The W-CDMA standard forms part of the 3G standard for European mobile phone technology. EC Treaty rules require that essential patent holders should not be able to exploit the extra power they have gained as a result of having technology based on their patent incorporated in the standard.

Mobile phone and chipset manufacturers who have lodged complaints against Qualcomm include Ericsson, Nokia, Texas Instruments, Broadcom, NEC and Panasonic.

This initiation of proceedings does not imply that the EC has proof of an infringement. It only signifies that the Commission will conduct an in-depth investigation of the case as a matter of priority.

The investigation will focus on the issue of whether the licensing terms and royalties imposed by Qualcomm are, as alleged by the complainants, not FRAND. The complaints also allege that charging non-FRAND royalties could lead to final consumers paying higher handset prices, slower development of the 3G standard, and related negative consequences for economic efficiency associated with inhibited growth of the standard. In addition, the complainants allege that this behaviour could negatively affect the standard setting process more generally as well as the adoption of the future 4G standard.

There is no strict deadline for the Commission to complete inquiries into anticompetitive conduct. Their duration depends on a number of factors, including the complexity of each case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defense.

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