Last updated: November 24, 2009 6:51 pm

Brussels drops Qualcomm antitrust probe

Europe’s top competition regulator has ended a four-year inquiry into patent royalty rates charged by Qualcomm after the remaining companies that had brought a complaint against the US mobile chipmaker withdrew.

European Commission officials said on Tuesday that they had “committed time and resources to the investigation in order to assess a complex body of evidence,” but had not reached any formal conclusions.

“All the complainants have now withdrawn or indicated their intention to withdraw their complaints and the commission has therefore to decide where best to focus its resources and priorities,” they said in a statement. “In view of this, the commission does not consider it appropriate to invest further resources in this case.”

The EU probe, which began in 2005, followed a complaint by Nokia, Broadcom, Texas Instruments, Ericsson, NEC and Panasonic Mobile Communications. This alleged that San Diego-based Qualcomm had refused to license patents to chipset competitors “on fair, reasonable and non-discriminatory terms,” while “offering lower royalty rates to handset customers who buy chipsets exclusively from Qualcomm”.

The complainants had argued that Qualcomm’s technology played less of a role in 3G than in the previous mobile phone generation and therefore its royalty rates should be lower.

But two of the complainants – Nokia and Broadcom – soon withdrew their objections after reaching settlements with the chipmaker.

This year, the remaining complainants won favourable decisions from the Japanese and South Korean competition authorities, with Seoul imposing a record fine of just over $200m on Qualcomm.

However, the issues and technologies involved were not identical to the EU case and Qualcomm is contesting both the Asian rulings.

There has been a lot of speculation over whether the EU authorities were as willing to pursue the case as their Asian counterparts. Neelie Kroes, the EU competition commissioner, is believed to have called a rarely used panel to review the situation.

Frustration at the lack of progress in Europe – and the hope of greater success in other jurisdictions – seems to have led the remaining companies to withdraw their EU complaint, although no official reason was given.

Ericsson said only that “after success in Korea and Japan, Ericsson withdraws its complaint with the European Commission”.

But Ericsson did signal that it hoped action by other parts of the commission might prove more productive – such as an industry directorate white paper on modernising information communication technology standardisation in the EU.

Qualcomm said it was “extremely pleased” with the outcome.

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