Telecom Firms File Qualcomm Complaint

Six telecommunications equipment makers said Friday they filed antitrust complaints with European regulators against Qualcomm Inc., claiming the California-based wireless technology company was refusing to license essential patents on fair terms.

Nokia Corp., LM Ericsson, Broadcom Corp., NEC Corp., Texas Instruments Inc. and Panasonic Mobile Communications Co. Ltd. asked the European Commission to investigate and stop Qualcomm's alleged abuse of EU competition rules.

"The companies believe that Qualcomm's anticompetitive 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," they said in a joint statement.

They said Qualcomm was making it harder for rival mobile phone chipmakers to compete because it was refusing to license essential patents on the latest cell phone technology on reasonable terms and offered lower royalty rates to handset customers who only buy Qualcomm chips.

The companies also claimed that Qualcomm was charging "excessive and disproportionate" royalties by asking the same rate for two types of

3G handset. Third-generation, or 3G, mobile technology offers faster data speeds that allow people watch video on their mobile phones. Both the high cost of handsets and the slow rollout of services so far has prevented 3G from becoming as popular as expected.

The European office of San Diego-based Qualcomm had no immediate comment on the complaints.

Qualcomm shares fell $2.33, or 5.4 percent, to $40.72 in morning trading on the Nasdaq Stock Market.

The EU head office said it had received the complaints. "We will examine the complaints carefully to see if there has been any violation of EU competition rules," EU spokesman Jonathan Todd told Dow Jones Newswires.

If EU regulators open a formal investigation and find Qualcomm guilty of breaking EU law, they can force it to change its licensing practices and fine the company up to 10 percent of its annual turnover.

Broadcom made similar complaints about Qualcomm's licensing practices when it filed a lawsuit in the United States, alleging Qualcomm was breaking U.S. antitrust rules. Broadcom has asked the U.S. District Court in the state of New Jersey to stop Qualcomm's alleged unfair business practices and order it to pay monetary damages.

Copyright 2005 The Associated Press.

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