Qualcomm accused of unfair conduct in EU

Six leading mobile telecommunications vendors have filed complaints to the European Commission charging Qualcomm Inc. with anticompetitive behaviour.

Broadcom Corp., Telefonaktiebolaget LM Ericsson, NEC Corp., Nokia Corp., Panasonic Mobile Communications and Texas Instruments Inc. individually filed complaints. They say that Qualcomm isn’t adhering to the agreement it made when it contributed its patents to the WCDMA (Wideband Code Division Multiple Access ) standard. WCDMA was approved by most European regulators for use in 3G (third-generation) mobile networks.

Ericsson, Nokia, Qualcomm, Siemens AG and Motorola Inc. are among the companies that contributed technology to the WCDMA standard, Ericsson spokesman Peter Olofsson said. They all agreed to license their technology on fair, reasonable and antidiscriminatory terms, but the companies that have filed the complaint say that Qualcomm isn’t living up to that agreement.

Qualcomm is essentially discounting the price of its patents when it sells chipsets that it manufactures. However, it requires third-party chip manufacturers to licences its patent technology, so that third-party chip makers must sell their chips for a higher price than Qualcomm does, Olofsson said. He said that in doing so Qualcomm is leveraging its patent position to its competitive advantage, an action that goes against the antidiscriminatory agreement companies made when creating the standard.

The companies that contributed to the WCDMA (Wideband CDMA) standard also agreed that the cost to handset manufacturers to license the combined patents shouldn’t exceed 10 percent of the total cost of the handsets. However, Qualcomm is charging the same rate to license its patents for WCDMA as it does for CDMA2000 even though its contribution to WCDMA is much smaller, Olofsson said. He says Qualcomm’s terms aren’t reasonable.

A Qualcomm spokesman in Europe has not responded to a request for comment.

Ericsson has approached Qualcomm previously with its concerns but Olofsson wouldn’t comment further on those discussions.

A spokeswoman at the European Commission said the it has received letters of complaint regarding Qualcomm and will consider an investigation. If Qualcomm is found to be conducting anticompetitive behavior, the Commission can fine the company, she said.

Qualcomm has historically had a tense relationship with the European mobile telecommunications industry. Qualcomm developed the CDMA standard, which competes with GSM (Global System for Mobile Communications), the standard created in Europe.

Prior to 3G, most European national regulators required that operators use GSM and excluded CDMA. The European industry also created the WCDMA standard as an upgrade to their existing GSM networks, following a different path than CDMA operators in other regions that use CDMA2000.