EU Elevates Qualcomm Investigation To Priority Status

LAWFUEL – The Law Newswire – The New York Times reports that the European Commission elevated its antitrust investigation against the chip maker Qualcomm to priority status Monday, after two years of apparent inactivity on the case.

The regulatory agency said an in-depth investigation would be conducted as “a matter of priority.” The move does not imply that the commission has conclusive proof of an infringement, it added.

In October 2005, six telecommunications companies accused Qualcomm of breaking antitrust laws in its licensing of mobile phone technology.

The companies — Broadcom, Ericsson, NEC, Nokia, Panasonic Mobile Communications and Texas Instruments — said Qualcomm’s royalty fees for next-generation mobile phone chips were excessive, breaking a series of agreements to keep fees at reasonable levels.

Qualcomm makes chips for cellphones and charges royalties to handset makers and chip makers that use technology covered by its patents.

The investigation focuses on whether the licensing terms and royalties imposed by Qualcomm are “fair, reasonable and nondiscriminatory,” the commission said. The inquiry is the first major antitrust investigation the commission is undertaking after its landmark victory against Microsoft in September.

If the commission finds against Qualcomm, it could force the company to change its licensing practices and fine it as much as 10 percent of its annual revenue.

The six complainants welcomed the development in the investigation, saying that they were concerned that Qualcomm’s practices were “harmful to the mobile telecommunications industry globally,” resulting in higher prices and less choice for carriers and consumers alike.

Qualcomm argues, however, that its licensing practices have not harmed the end customers, as prices have declined over the two-year period of the investigation.

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