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Japanese antitrust authorities slapped a 'cease and desist' order on Qualcomm, an action they have been threatening for some time. The chip giant has been told it must revise its licensing deals with Japanese phonemakers, after the Fair Trade Commission rejected the company's arguments against a draft order issued earlier in the summer.

This would involve removing clauses in Qualcomm's cross-licensing deals that give it free access to patents held by Japanese companies. The FTC ruled that handset vendors, namely NEC, Panasonic and Sharp, were "forced" to agree to deals in order to access essential CDMA technology, but these resulted in reduced competition. The Commission also warned Qualcomm not to engage in similar practises for LTE chips.

Qualcomm repeated its previous response that it had not forced its customers to enter into licensing agreements, but that these had been subject to intense negotiation, were common practise in many parts of the world, and created benefits for the wireless industry and consumers by promoting "patent peace" and reducing transaction costs and licensing fees. I

"In addition to Qualcomm, many other industry members throughout the world, including handset and infrastructure manufacturers as well as wireless operators, have relied on these provisions in business planning," Donald Rosenberg, Qualcomm's general counsel, said in a statement. "If Qualcomm were to eliminate these provisions, there is a risk that some Japanese licensees may attempt to assert their previously licensed patents against Qualcomm, its customers and its licensees."

Qualcomm said it would request a full evidentiary hearing on the matter, and could appeal in Japanese courts, and in the meantime, it will aim to have the order suspended or stayed during the course of the review process.

The tide in east Asia, where there are several powerful CDMA operators and long-time partners of Qualcomm, is turning against the wireless chip leader. In July, Korean antitrust officials said they would fine Qualcomm KRW260bn ($218m) for allegedly abusing a dominant market position. Qualcomm argued the agency improperly characterized legitimate discounts for customers as a penalty on non-customers.

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