BRD.L Regulatory News (BRD)

1 Oct 2007 10:25

Broadcom Corp.28 September 2007 1 October, 2007 European Commission's continuing investigation of Qualcomm is welcomed Broadcom, Ericsson, NEC, Nokia, Panasonic Mobile Communications and TexasInstruments welcome the continuation of the investigation by the EuropeanCommission into complaints regarding anti-competitive practices by Qualcomm.While each company has made an individual complaint, they share concerns aboutQualcomm's practices. The companies believe that these practices are harmful tothe mobile telecommunications industry globally and, in particular undermineconfidence in standards-setting processes, threaten the supply of WCDMAchipsets, impede innovation, and raise the costs of third-generation (3G)technology and handsets. As a result, carriers and consumers face higher pricesand fewer choices. The complaints refer to Qualcomm's breach of European Union (EU) competition lawand failure to meet the commitments it made to international standard-settingorganisations that it would license its declared essential patents on fair,reasonable and non-discriminatory terms. Without these commitments, WCDMAtechnology would not have been commercially implemented as part of the UMTS 3Gstandard in Europe and elsewhere. The companies alleged that Qualcomm hasviolated EU competition rules by charging disproportionate and discriminatoryroyalties for its declared WCDMA essential patents. They also stated thatQualcomm violates those rules by trying to exclude competing manufacturers ofchipsets for mobile phones from the market and to prevent others from entering.These actions, in addition to breaching the European Union's competition law,are in breach of Qualcomm's commitments to standard-setting bodies. The Commission has decided to allocate priority to the continuing investigationfollowing the lodging of the complaints in October 2005. The companies welcomethis decision and confirm their continued cooperation with the EuropeanCommission. -Ends- Enquiries Brunswick Joanna McDwyer +44 20 7404 5959 Broadcom +1 949 926 5555 Bill Blanning Ericsson Rob Elston +46 8 719 6992 NEC +44 20 8752 2794 Chris Shimizu Nokia +852 6971 6918 Anne Eckert Panasonic Mobile Communications +49 611 235305 Mike Takeda Texas Instruments +1 214 480 6808 Gail Chandler Note to editors: The following quotes about the EC's decision are from each ofthe companies that filed formal complaints. Broadcom: ""Broadcom welcomes the Commission's decision to continue itsinvestigation of Qualcomm's practices. The decision underscores the significantpolicy issues at stake and the importance of ensuring the future viability bothof industry standards-setting processes and of a level playing field forcompeting providers of chipsets and intellectual property in the 3G space, whichQualcomm's conduct otherwise threatens to undermine. We believe that the ECplays an important role, in our case and others, in ensuring conditions wherefair competition helps promote product innovationand technology advancements that ultimately benefit consumers in Europeand throughout the world. The decision demonstrates Europe's continuing desireto foster a competitive environment that will stimulate continued growth in theglobal information economy." -- David A. Dull, Senior Vice President, BusinessAffairs, and General Counsel, Broadcom Corporation. Ericsson: "The success of a standard depends on the essential patent holdershonouring their FRAND commitments. In this case, a single patent holder --Qualcomm -- is charging royalty rates much higher than other essential patentowners. If the other patent holders were to do as Qualcomm is doing, royaltiescould raise the cost of WCDMA handsets considerably -- thus raising the pricesto consumers. Ericsson is pleased the Commission has decided to continue itsinvestigation of this case." -- Kasim Alfalahi, Vice President, PatentLicensing, Ericsson. NEC: "NEC welcomes the European Commission's continuation of its investigationas a step forward in solving the issues raised by Qualcomm's anti-competitivebusiness practices. NEC will continue to cooperate fully with the investigationby the European Commission." -- Hideyuki Ogata, Vice President, IntellectualAsset Management Unit, NEC Corporation. Nokia: "The proper functioning of standardization requires that companies whosepatented technology is adopted into a standard commit to licence these patentson fair, reasonable and non-discriminatory terms. Breaking these commitmentscompromises the whole standardization process, stifles innovation and harmsconsumers. We welcome the European Commission's continuation of theinvestigation into Qualcomm's business conduct." -- Tero Ojanpera, ChiefTechnology Officer, Nokia. Panasonic: "Panasonic Mobile Communications fully supports the EuropeanCommission's investigation into Qualcomm's anti-competitive behaviour anddisproportionate royalty rates in the mobile telecommunications sector. It isessential for both current and future standards that companies which commit tolicense their technologies on fair, reasonable and non-discriminatory termsadhere to those commitments." -- Yoshiaki Tokuda, Director, IntellectualProperty Center, Panasonic Mobile Communications Co., Ltd. Texas Instruments: "We commend the Commission for deciding to continue itsinvestigation. TI attaches great importance both to IP protection and to thecreation of open standards. Where leading technology companies have agreed tocontribute intellectual property and inventive genius to a standard, there is noroom for exclusionary and discriminatory practices." - Joseph F. Hubach, SeniorVice President and General Counsel, Texas Instruments Incorporated. This information is provided by RNS The company news service from the London Stock Exchange