TELECOM Digest OnLine - Sorted: Telecom Firms File Qualcomm Complaint

Telecom Firms File Qualcomm Complaint

Associated Press News Wire (ap@telecom-digest.org)
Fri, 28 Oct 2005 10:17:39 -0500

Six telecommunications equipment makers said Friday they filed
antitrust complaints with European regulators against Qualcomm Inc.,
claiming the California-based wireless technology company was refusing
to license essential patents on fair terms.

Nokia Corp., LM Ericsson, Broadcom Corp., NEC Corp., Texas Instruments
Inc. and Panasonic Mobile Communications Co. Ltd. asked the European
Commission to investigate and stop Qualcomm's alleged abuse of EU
competition rules.

"The companies believe that Qualcomm's anticompetitive behavior has
harmful effects for the mobile telecommunications sector in Europe, as
well as elsewhere, because carriers and consumers are facing higher
prices and fewer choices," they said in a joint statement.

They said Qualcomm was making it harder for rival mobile phone
chipmakers to compete because it was refusing to license essential
patents on the latest cell phone technology on reasonable terms and
offered lower royalty rates to handset customers who only buy Qualcomm
chips.

The companies also claimed that Qualcomm was charging "excessive and
disproportionate" royalties by asking the same rate for two types of
3G handset. Third-generation, or 3G, mobile technology offers faster
data speeds that allow people watch video on their mobile phones. Both
the high cost of handsets and the slow rollout of services so far has
prevented 3G from becoming as popular as expected.

The European office of San Diego-based Qualcomm had no immediate
comment on the complaints.

Qualcomm shares fell $2.33, or 5.4 percent, to $40.72 in morning
trading on the Nasdaq Stock Market.

The EU head office said it had received the complaints. "We will
examine the complaints carefully to see if there has been any
violation of EU competition rules," EU spokesman Jonathan Todd told
Dow Jones Newswires.

If EU regulators open a formal investigation and find Qualcomm guilty
of breaking EU law, they can force it to change its licensing
practices and fine the company up to 10 percent of its annual
turnover.

Broadcom made similar complaints about Qualcomm's licensing practices
when it filed a lawsuit in the United States, alleging Qualcomm was
breaking U.S. antitrust rules. Broadcom has asked the U.S. District
Court in the state of New Jersey to stop Qualcomm's alleged unfair
business practices and order it to pay monetary damages.

Copyright 2005 The Associated Press.

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