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Last Updated: Sunday, 30 October 2005, 10:54 GMT
Phone firms in Qualcomm EU charge
Nokia phones
Nokia is Qualcomm's biggest customer
Half-a-dozen firms including Ericsson, Nokia and Texas Instruments are seeking European Commission action after saying a US firm is stifling phone chip trade.

They accuse wireless outfit Qualcomm of "anti-competitive conduct" and call on it to license technology in a "fair, reasonable and non-discriminatory" way.

Qualcomm said the charge was "factually inaccurate and legally meritless" and that it would defend itself.

The EC will look at the claims, also made by Broadcom, NEC and Panasonic.

Technology standard

Qualcomm dominates the market for chips in US mobile phones, and sells licenses and chips for new phone technologies in Europe.

Texas Instruments is Qualcomm's biggest competitor in the market for mobile phone chips and Nokia is its biggest client.

It pioneered the introduction of code division multiple access (CDMA) technology into wireless telephone services.

Microchips on circuit board
Nokia and Texas Instruments launched a chip alliance in 2003

That produced the basis for the current WCDMA 3G mobile technology standard, being introduced by most mobile phone makers.

The six complainants allege Qualcomm attempted to block other chip-makers from selling their products by "refusing to license essential patents" to rival makers of chipsets - the hardware inside a mobile phone - on fair cost terms.

It is also claimed it offered lower rates to phone makers "who buy chipsets exclusively from Qualcomm".

Broadcom is pursuing a similar case in the US.

In a statement the firms said the companies "believe Qualcomm's anti-competitive behaviour 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."

'Dominant position

Qualcomm believes that broad acceptance of its licensing methods shows it behaves in a fair manner, and said it had agreements with five out of the six complainants.

But Ericsson said in a statement that Qualcomm was charging "excessive and disproportionate royalties".

And Nokia legal council Maurits Dolmans said: "They had a dominant position and they abused that dominant position."

In the 1990s there was a dispute between Qualcomm and Nokia and Ericsson in the over the development of standards for high-speed wireless technology.

And two years ago Nokia and Texas Instruments were part of a four-strong team known as Mobile Industry Processor Alliance.

It was set up to "define and promote open standards" over how the interfaces of mobile phones can talk to the chips at their heart - in a move designed to make sure parts and technology from different vendors would work together, and thus stop any one kit maker from cornering the market.

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