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Wed, Jul 29, 2009 - Page 10 News List

Japanese regulators take Qualcomm to task

IN THE WORKS: The Fair Trade Commission will cite contracts that give Qualcomm unfair advantages over Japanese cellphone makers, several newspaper reports said


Qualcomm Inc has been notified that Japanese regulators plan to order the US wireless chip maker to stop abusing its market dominance in violation of antitrust laws, an official with the Fair Trade Commission said on Monday.

The commission will cite contracts that give Qualcomm unfair advantages over Japanese cellphone makers, several newspaper reports said.

Some agreements, for example, restrict Japanese companies from filing a complaint even when they believe Qualcomm has infringed on patent rights, the Asahi Shimbun said.

The commission has alerted Qualcomm of its intent but has not officially announced the impending order, said the official, who confirmed the newspaper reports. He asked not to be named because of department policy.

Qualcomm said in a statement it could not comment until it reviews a full translation of the draft order. The company said it plans to file a written response.

“It is important to note that Qualcomm has never seen any of the evidence upon which the [commission] may be relying and has not, until today, even been aware of many of the allegations,” Qualcomm said.

Last week, South Korea’s fair trade regulator slapped California-based Qualcomm with a record 260 billion won (US$208 million) fine over what it said was abuse of market dominance.

The Korea Fair Trade Commission, which had been investigating Qualcomm since 2006, said the company abused its dominant position in code division multiple access (CDMA) cellphone chips by charging higher royalties for companies that used rival chipsets.

It also said Qualcomm favored customers who used its products by offering rebates.

In a statement on Thursday, Qualcomm vowed to fight the decision and called the fine “excessive and unwarranted.”

Qualcomm developed CDMA, a rival standard to the dominant cellular standard GSM, or global system for mobile. The company controls most of the key patents.

CDMA is used in the US, South Korea and Japan.

Qualcomm, which licenses technology for cellphones and manufactures semiconductor chips that run them, earns money by licensing the CDMA technology to other chip makers, handset manufacturers and wireless technology companies.

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