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Qualcomm hit with new antitrust action

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July 03,2006
Texas Instruments Inc., the world’s biggest cellular phone chip maker, and Broadcom Corp. have complained to Korea’s antitrust agency that Qualcomm Inc. has abused its market dominance here. The complaint was filed on June 23, the Fair Trade Commission confirmed yesterday, declining any further comment. According to industry sources, Texas Instruments and Broadcom complained that Qualcomm was selling its mobile phone chips bundled with other chips, unfairly preventing cell phone makers from buying products from Qualcomm’s rivals. Qualcomm’s Korean unit spokesman, Kim Seung-soo, declined to comment. The complaint by the two U.S. rivals of Qualcomm is the latest in a series of antitrust disputes involving the world’s second-largest mobile phone chip maker, which dominates the Korean market. In April, a Korean maker of software for cell phones, Nextreaming Corp., also complained to the antitrust agency that Qualcomm unfairly bundled its chip sets and software. Thin Multimedia Inc., another local software company, joined the complaint last month with the same accusation. After Nextreaming’s complaint, the Fair Trade Commission launched an investigation into Qualcomm. The legal risks that Qualcomm is facing are not limited to Korea; other antitrust actions have been filed elsewhere. In October, six companies, including Texas Instruments, Broadcom and Nokia, filed a complaint with the European Commission concerning Qualcomm’s allegedly “excessive” royalties. Qualcomm owns most of the key patents for code division multiple access technology, Korea’s wireless telephony network standard. Korean handset makers, including Samsung Electronics Co. and LG Electronics Inc., pay royalties to Qualcomm that totaled 3.3 trillion won ($3.5 billion) over the last 10 years for using the company’s patented CDMA technologies, according to the Information Ministry. Korea is Qualcomm’s biggest market, accounting for 37 percent of the company’s sales in its latest fiscal year. by Moon So-young


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