(Corrects paragraph 13 to show six companies issued statement, not five)
BRUSSELS (Reuters) - The European Commission has launched antitrust proceedings against U.S. chip maker Qualcomm QCOM.O after mobile phone manufacturers complained it charged far too much for vital technology licenses.
Nokia NOK1V.HE, Broadcom Corp BRCM.O, NEC Corp 6701.T, Texas Instruments Inc TXN.N, Matsushita Electric Industrial Co Ltd 6752.T and Ericsson ERICb.ST complained in 2005 that Qualcomm's license fees for its third-generation technology were far too high.
The Commission said in a statement on Monday it would conduct an in-depth investigation as a matter of priority.
The move had long been expected, but its announcement comes just two weeks after the Commission won a major victory against U.S. technology giant Microsoft MSFT.O.
On September 17, the EU’s top court threw out Microsoft’s appeal against a landmark 2004 antitrust ruling by Brussels.
European Commission spokesman Jonathan Todd said there was no link between the cases. The EU executive decided in August to launch the proceedings against Qualcomm but was only now able to make the announcement, he said.
At the heart of the Qualcomm case is the allegation by the phone makers that it broke an agreement to license patents on “fair, reasonable and non-discriminatory terms”.
The Commission said its move did not imply it had conclusive proof of any infringement, a point stressed by Qualcomm.
“We welcome the continuation of our dialogue with the Commission in order to demonstrate that the complaints are without merit and are motivated by commercial considerations of the entrenched complainants,” Steve Altman, president of Qualcomm, said in a statement.
He accused the complainants of trying “to stifle the competition that Qualcomm brings to the market”.
The probe could lead to the Commission scrapping the investigation, seeking a settlement with Qualcomm or issuing a statement of objections if it sees legal violations.
The companies that complained said at the time that the chipmaker charged the same for using its patents for new technology as it did for an older system, even though its patents accounted for a far smaller percentage of the new system.
The six phone producers issued a statement on Monday reiterating their allegations against Qualcomm, which they said was trying to exclude rival chip manufacturers from the market.
The complainants say overly high royalties could push up handset prices for consumers, hamper development of the 3G standard and lead to problems with future phone technology.
But Andrew Gilbert, head of Qualcomm Europe, said the development of new 3G devices had been swift and prices were falling, disproving the claims of the phone makers.
“All of the worst fears of our opponents have been exposed as complete rubbish,” he told Reuters in Helsinki.
Qualcomm is embroiled in multiple legal battles including a Fair Trade Commission investigation in South Korea and patent infringement cases with Broadcom and Nokia.
The U.S. International Trade Commission recently banned imports of some phones with Qualcomm chips that were found to infringe a Broadcom patent. The ban has been stayed while Qualcomm appeals.
The ITC is now also reviewing a Qualcomm request for a U.S. ban against Nokia phones it says infringe on three Qualcomm patents.
Additional reporting by Tarmo Virki in Helsinki and Sinead Carew in New York
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