Broadcom, Ericsson, NEC, Nokia, Panasonic Mobile Communications and Texas Instruments have each filed Complaints to the European Commission requesting that it investigate and stop Qualcomm's anti-competitive conduct in the licensing of essential patents for 3G mobile technology.
The companies state that Qualcomm is violating EU competition law and failing to meet the commitments Qualcomm made to international standard bodies around the world that it would license its technology on fair, reasonable and non-discriminatory terms. Absent these commitments, the WCDMA 3G standard would not have been adopted. The companies say that Qualcomm is infringing these rules by:
- trying to exclude competing manufacturers of chipsets for mobile phones from the market and preventing others from entering. To this end, Qualcomm has committed a number of abuses, ranging from the refusal to license essential patents to potential chipset competitors on fair, reasonable and non-discriminatory terms to offering lower royalty rates to handset customers who buy chipsets exclusively from Qualcomm.
- charging royalties for its WCDMA essential patents that are excessive and disproportionate; in particular by imposing the same royalty rate on WCDMA 3G handsets as it does for CDMA2000 3G handsets despite the fact that Qualcomm has contributed far less technology to the WCDMA 3G standard than it has to the CDMA2000 standard.
The companies believe that Qualcomm's anti-competitive 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.
Company Statements
"Major telecommunications equipment companies on three continents are standing up and saying that Qualcomm's business practices are unfair, anticompetitive and ultimately illegal. Qualcomm's illegal practices stifle competition and ultimately hurt the consumer." David A. Dull, Senior Vice President, Business Affairs; General Counsel; and Secretary, Broadcom Corporation
"Qualcomm committed to standard setting organisations that it would license its technology on fair, reasonable and non-discriminatory terms. In spite of this and in breach of competition law, Qualcomm is charging excessive and disproportionate royalties. This means ultimately that consumers may have to pay more than they should for their mobile handsets." Kasim Alfalahi, Vice President IPR Licensing and Patents, Ericsson AB
"Qualcomm's anti-competitive licensing practices and excessive royalties are restricting innovation and the development of 3G mobile telephony to the detriment of consumer choice." Botaro Hirosaki, Senior Vice President, NEC Corporation
"Intellectual property rights have an increasing role in business. There are rules of law that apply to the licensing business, and patentees and other intellectual property rights owners cannot ignore them." Ilkka Rahnasto, Vice President, Intellectual Property Rights, Nokia Corporation
"Panasonic Mobile Communications believes that Qualcomm is charging excessive and disproportional royalty rates in breach of EU competition law and industry requirements to offer licenses for essential patents on fair, reasonable and non-discriminatory terms." Haruo Suzuki, Director, Member of the Board, Panasonic Mobile Communications Co. Ltd.
"Standards are established to guide the industry's technology development and provide a healthy environment for innovation and competition. We believe Qualcomm has abused its licensing position in certain standards and has inhibited legitimate competition. If this conduct goes unchecked, the risk is that consumers in Europe and around the world will pay higher prices for mobile phones and services and have less access to innovative products." Joe Hubach, General Counsel, Texas Instruments Incorporated
