The European Commission has begun an antitrust investigation of Qualcomm for suspected exploitative practices in the market for chipsets for mobile phones, it announced this week.
The investigation concerns an alleged breach of European rules on abuse of a dominant market position in the market for chipsets for phones based on CDMA (code-division multiple access) and WCDMA (wideband CDMA) technology. WCDMA chips area used in European 3G (third-generation) mobile phones based on the UMTS (Universal Mobile Telecommunications System) standard.
The launch of the investigation does not imply that the Commission has conclusive proof of an infringement, it said.
The Commission set no timetable for completion of its investigation, although it said it would be "a matter of priority."
The Commission began the investigation following complaints in October 2005 from Nokia, Telefonaktiebolaget LM Ericsson, Texas Instruments, Broadcom, NEC and Matsushita Electric Industrial (Panasonic) that Qualcomm did not license its technology on fair, reasonable and non-discriminatory (FRAND) terms.
The six companies said that while they had filed separate complaints about Qualcomm, they shared concerns about Qualcomm's practices.
Companies holding patents essential to the development of products that comply with certain technology standards are often required to license the patents on such FRAND terms.
The companies complained that not offering patent licenses on FRAND terms could inhibit competition and hurt consumers by slowing the development of new phones, according to the Commission. By making it harder for companies to work together, it could also harm the standards-setting process, the Commission said.
Qualcomm said that its licensing model had allowed new vendors to enter the market, resulting in a greater variety of products and falling handset prices.