The proceedings by the European Commission against Qualcomm Incorporated, a US chipset manufacturer, relate to one of the most difficult questions in the tech sector today: "On what terms can an owner license its patented technology if that technology has been chosen to be incorporated into a mandatory industry standard?"

At the heart of the proceedings are an alleged breach of EC Treaty rules on abuse of a dominant market position (Article 82). The alleged infringement concerns the terms under which Qualcomm licenses its patents essential to the WCDMA standard (i.e. the standard underpinning 3G mobile phone technology). This follows complaints lodged with the Commission by Ericsson, Nokia, Texas Instruments, Broadcom, NEC and Panasonic, who are all mobile phone and/or chipset manufacturers.

The complaints allege that Qualcomm's licensing terms and conditions are not Fair, Reasonable and Non-Discriminatory ("FRAND") and, therefore, may breach EC competition rules. The economic principle underlying FRAND commitments is that 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 that must be adhered to by all those in the industry.

This initiation of proceedings does not imply that the Commission has proof of an infringement. It only signifies that the Commission will conduct an in-depth investigation of the case as a matter of priority. There is no strict deadline for the Commission to complete those inquiries.