July 3, 2006 5:06 pm

Broadcom and TI take action on Qualcomm

Texas Instruments and Broadcom have filed formal complaints against Qualcomm in South Korea, alleging that the US company was abusing its market dominance in the country with certain types of mobile chip technology.

The action by the two US chipmakers adds to the pressure on Qualcomm after the two, and Nokia, Ericsson, NEC and Panasonic in October also complained to Brussels over the US company’s competitive practices.

Qualcomm licenses code division multiple access (CDMA) technology, the second most widely used wireless network standard in the world after GSM.

The companies alleged that Qualcomm unfairly used its patents on third-
generation mobile technologies to squeeze excessive royalties and licensing deals out of the industry. Broadcom has made a separate complaint through the US legal system.

Na Yang-ju, a spokesman for the Korea Fair Trade Commission, on Monday said: “We are looking into whether Qualcomm abused its dominant position in the market, regarding its CDMA technology, following the complaints made by the two US chipmakers on June 23.”

Mr Na said he expected the investigation to take some time as KFTC was probing Qualcomm over alleged unfair business practices, after two local handset software producers – Nextreaming and Thin Multimedia – lodged similar complaints against Qualcomm this year.

KFTC officials raided the Seoul offices of Qualcomm in April for the investigation. Qualcomm Korea declined to comment on the investigation.

Texas Instruments and Broadcom have claimed that Qualcomm was leading the 3G W-CDMA chipset market in Korea by discriminating in its application of royalties and that it dominated the local CDMA modem chip market through a similar royalty policy.

The US company supplies chips to Korean mobile phone manufacturers including Samsung Electronics and LG Electronics.

If it is found guilty of violating competition rules, Qualcomm would be forced to change its business practices or pay fines.

Qualcomm is one of a string of US technology companies being investigated by Korea’s anti-competition regulators.

Microsoft, the US software company, has been ordered by KFTC to unbundle its operating system and pay a Won33bn ($35m) fine for abusing its dominant market position.

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