A competition law expert has said that the case
highlights how confident the Commission now is on antitrust matters
in the wake of the Microsoft judgment last month, and said that
national competition authorities would follow its lead.
The case concerns accusations first made against Qualcomm by
rival chip makers in 2005, when Nokia and others made a formal
complaint to the Commission. The complaint alleges that Qualcomm
abused the fact that its technology was chosen for use in the
technical standard used for third generation (3G) mobile phone
technology.
"Essential patent holders should not be able to exploit the
extra power they have gained as a result of having technology based
on their patent incorporated in the standard," said a statement
from the European Commission.
The investigation will focus on the issue of whether the
licensing terms and royalties imposed by Qualcomm are, as alleged
by the complainants, not "fair, reasonable and non-discriminatory,"
it said. "In a context of standardization, a finding of
exploitative practices by Qualcomm in the WCDMA licensing market
contrary to Article 82 of the EC Treaty may depend on whether the
licensing terms imposed by Qualcomm are in breach of its free,
reasonable and non-discriminatory commitment."
The Commission said that it would conduct an in-depth
investigation as a matter of priority and that there was no fixed
timetable under which it must operate.
In August the Commission accused memory maker Rambus of abusing
its dominant market position and conducting a "patent ambush".
In July, it issued formal charges against chip giant Intel after
a six-year investigation into anti-competitive practices allegedly
carried out by the firm. It said that the company had an "overall
anti-competitive strategy".
Competition law expert Guy Lougher of Pinsent Masons, the law
firm behind OUT-LAW.COM, said that the flurry of activity indicated
a change of priorities at the Commission.
"It is interesting because there has been flimsy Commission
activity in relation to intellectual property licensing, it is a
policy area the commission has been more reluctant to get involved
in than cases of pricing and exclusionary issues," he said. "On the
back of the Microsoft case the Commission is becoming more
aggressive and interested in these areas. The Microsoft case has
encouraged the Commission to take a harder stance."
Lougher said that these cases could have a knock-on effect at a
national level as well as a European one.
"Patent policy and standard setting is a very important area,
and it is important to have accessible standards," he said. "I
think this is an area we will see more activity from the Commission
on, and that will mean there will be more activity by competition
authorities taking their lead from the Commission."
"The Commission tends to be a trend setter and authorities have
mirrored the Commission. If it is actively engaged with the
inter-relationship between rules on abuse and intellectual property
protection then we will see national competition authorities take
more of an interest," he said.
The Microsoft case which Lougher said has given the Commission
new antitrust confidence related to a 2004 Commission antitrust
ruling against the software giant for freezing out competitors
using its 95% control of the operating system market.
The European Court of First Instance ruled last month that the
Commission judgment was correct. Microsoft may appeal.
