November 24, 2009

EU drops Qualcomm antitrust probe

Ericsson and other manufacturers withdraw complaints

By Paul Meller

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The EU has dropped its antitrust probe into Qualcomm's patent licensing practices after Ericsson and others withdrew their complaints.

Qualcomm was accused of charging mobile network equipment manufacturers too much for the use of its patents on technology essential for Europe's 3G mobile phone standard, and the 4G standard now under development.

The European Commission's four year-long probe never got as far as endorsing the complaint.

"All complainants have now withdrawn or indicated their intention to withdraw their complaints," the Commission said, adding that it "does not consider it appropriate to invest further resources in this case".

Ericsson, together with Nokia, Broadcom, Panasonic, NEC and Texas Instruments complained to the Commission in 2005 that Qualcomm was violating antitrust laws and pushing up prices to equipment manufacturers that ultimately resulted in higher retail prices for mobile telephony.

Ericsson is withdrawing its complaint after the successes it had in curbing Qualcomm's behavior with regulators in South Korea in July and Japan in September.

The Korean Fair Trade Commission imposed its biggest ever antitrust fine of $200m on the company, while its Japanese equivalent imposed a strict cease and desist order on the firm.

It added that it would continue to monitor Qualcomm's licensing policy "to ensure a robust, enforceable and fair intellectual property rights regime for standards, particularly those relating to 3G and 4G wireless technologies".

Another reason for withdrawing the European antitrust complaint was because it was too expensive to continue.

"We have decided to spend our resources otherwise," said Ericsson spokeswoman Nina Macpherson.

"It is a complex issue and we have decided to work with the industry to discuss these problems," she said.

The industry directorate of the Commission is looking into patent licensing practices in relation to technology standards. Macpherson said Ericsson would redirect its efforts away from antitrust, towards this debate.

"It's a new opportunity to discuss these problems," she said.

Qualcomm is the world's biggest designer of chips used in mobile phones. It generates revenues from royalties on its patents for CDMA, a technology that is widely used in modern handsets.

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