EC to set up panel for Qualcomm patent probe

Antitrust regulators in the European Commission are considering setting up a special panel to unravel the long-drawn out case pending against Qualcomm Inc. concerning patent royalty payments.

The commission began probing Qualcomm's patent royalty rates after a 2005 complaint by Nokia Oyj, Broadcom Corp., Texas Instruments Inc., Ericsson AB and two others groups.

Nokia and Broadcom withdrew their complaints last year after reaching settlements worth more than $2.5 billion.

The panel—known as the "devils advocate"—is rarely used and is only convened for major and highly complex cases that can have an impact on competition policy.

It generally comprises about 20 EC officials, and its deliberations are passed on to the EC Commissioner, in this case Nellie Kroes, before any action is decided.

By calling a devil's advocate panel, lawyers said Kroes is showing that she wants to hear several opinions before reaching a formal decision on Qualcomm, which could be fined 10 per cent of its annual sales.

It is understood there is a legal fight within the Commission regarding the case, with some advisers arguing there is insufficient evidence to pursue the complaint.

Kroes made headlines earlier this year when she found Intel guilty of anticompetitive behavior and slapped a record $1.4 billion fine on the chipmaker.

Qualcomm has always strenuously denied the claims that it overcharged for royalties on some of its chips.

A decision on whether to proceed is expected within weeks as Kroes is expected to leave her post late October when a new Commission is appointed by the European Union.

The EU probe follows recent legal setbacks for Qualcomm in Japan and Korea. Last month, Japan's Fair Trade Commission accused the company of forcing customers to give up their patent rights. Qualcomm denied that it forces Japanese customers to hand over patent rights for free.

The company was fined about $210 million late July by South Korea's antitrust agency for deterring competition through unfair fees. Qualcomm is appealing the fine.

- John Walko
EE Times Europe