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  • Oct 29th, 2005
  • Comments Off on Top tech firms complain to EU over Qualcomm
Six technology firms including Ericsson, Nokia and Texas Instruments have complained to EU regulators about Qualcomm, accusing it of stifling competition in the market for chips for 3G high-speed mobile phones and abusing patent rights.

A spokesman for Qualcomm declined to comment. US company officials were not immediately available to respond to the allegations on Friday. Qualcomm shares fell on the Inet electronic brokerage in New York by 2.2 percent to $42.10.

Ericsson, Nokia, Texas Instruments, Broadcom, Panasonic Mobile Communications and NEC accused Qualcomm, which sells chips and technology licences for mobile phones, of trying to exclude rival chipset makers from the market and prevent others from entering.

"The companies believe Qualcomm's anti-competitive behaviour 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.

The firms said Qualcomm had offered preferential terms on royalties on technology patents to manufacturers which also bought their chipsets - the hardware inside a mobile phone.

Such royalties must be paid to many firms in the tech sector which have been involved in developing 3G technology, but the complainants said Qualcomm should not link preferential terms for chipsets to royalty payments.

Qualcomm had also charged royalties for WCDMA essential patents that were "excessive and disproportionate" to the role Qualcomm had played in developing the technology, the firms said.

They said they had filed their complaint to the European Commission, which enforces competition rules in the 25-nation EU. Broadcom has already launched a case in the US courts.

"I can confirm that the European Commission has received the complaints and will examine them carefully," said Commission spokesman Jonathan Todd in Brussels.

Qualcomm dominates the market for code division multiple access (CDMA), the dominant mobile standard in the United States and which is also used in Latin America and parts of Asia.

It also sells licences and chips for WCDMA, a high-speed wireless technology becoming popular in Europe and elsewhere.

Kasim Alfalahi, Ericsson's vice president for IPR licensing and patent development, said in a statement that Qualcomm was charging "excessive and disproportionate royalties".

"This means ultimately that consumers may have to pay more than they should for their mobile handsets," he added.

Despite Broadcom's US action, officials from the six firms told a conference call they were focusing their action on Europe as that was where 3G was currently being rolled out.

Copyright Reuters, 2005


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