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EU stops haranguing Qualcomm

Four-year case shelved indefinitely

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The European Commission has shut down its investigation into Qualcomm's alleged abuse of monopoly, as the complainants got bored and wandered off.

The investigation was triggered by a complaint from Ericsson back in 2005, and was formally launched in October 2007. During the intervening time various other regulatory authorities have ruled against Qualcomm which, Ericsson told Reuters, prompted them to withdraw their complaint to the EU.

Regulators in Japan and South Korea have also been looking at Qualcomm's business practices. They have mainly examined the way the company upsells its products to customers who are obliged to buy CDMA technology from the owner. Those investigations were cited by Ericsson as being factors in the decision to withdraw the EU complaint.

The fact that Qualcomm has settled its differences with Nokia and Broadcom must also be a factor. Both companies had also complained to the EU, and withdrawn their complaints when peace terms were negotiated.

Japan's Fair Trade Commission has been demanding that Qualcomm rewrite its contracts, claiming that customers were forced into licensing bundled patents and entering into agreements that prevented customers suing Qualcomm for later infringements. Qualcomm admits the contract conditions but denies anyone was forced to sign them.

The complaints made to the EU relate to alleged breaking of FRAND agreements - Fair, Reasonable and Non-Discriminatory pricing agreements - which are often required by standards bodies before a technology will be incorporated into a standard. Most 3G networks are based on Wideband CDMA, which in turn is based on CDMA technology largely owned by Qualcomm and subject to FRAND agreements.

Qualcomm is, of course, overjoyed. It told us:

We are delighted with the decision to drop the case; commonsense has prevailed. From the outset we said that there was no case to answer and this decision by the EC, after four years of investigation, vindicates that position.

We're not sure that hanging on until your detractors wander off exactly vindicates Qualcomm's business practices, but Ericsson couldn't afford to keep the action alive on its own so Qualcomm walks away from what could have been a damaging inquiry. ®

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