EC Launches Proceedings Against Qualcomm Over Licensing

by Ulrika Lomas, for LawAndTax-News.com, Brussels

03 October 2007

The European Commission announced on Monday that it has decided to open formal anti-trust proceedings against US chipset manufacturer, Qualcomm over an alleged breach of EC Treaty rules on abuse of a dominant market position (Article 82).

Qualcomm is a holder of intellectual property (IP) rights in the CDMA and WCDMA standards for mobile telephone. The WCDMA standard forms part of the 3G (third generation) standard for European mobile phone technology (also referred to as "UMTS").

The EC's move follows complaints lodged with the Commission by Ericsson, Nokia, Texas Instruments, Broadcom, NEC and Panasonic, all mobile phone and/or chipsets manufacturers. The complaints allege that Qualcomm's licensing terms and conditions are not fair, reasonable and non-discriminatory and, therefore, may breach EC competition rules.

The complaints also allege that Qualcomm's licensing regime could lead to final consumers paying higher handset prices, a slower development of the 3G standard, and all the 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.

However, the initiation of proceedings does not imply that the Commission 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.

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