A distressed caller dials 911 from their mobile phone to report an incident. The mobile carrier then immediately pinpoints the exact position of the caller, assisting quick response units. This sounds like a great technology that should be as widely available as possible, right?
TruePosition, a branch of Liberty Media Corp., filed a lawsuit against Alcatel Lucent (NYSE:ALU), Ericsson and Qualcomm for conspiring to block out its positioning technology from the support roster of LTE 4G wireless networks. Judge Robert Kelly declared that TruePosition’s claim is plausible and is grounds for a lawsuit, denying an earlier motion to dismiss the case.
TruePosition offers a service which helps carriers localize the exact coordinates of a caller dialing emergency services in the U.S. The plaintiff claims that the three companies effectively broke antitrust laws by trying to shut out TruePosition’s service from future LTE 4G to leverage their own positioning technologies.
The judge stated that TruePosition has not presented hard evidence of ALU, Ericsson and Qualcomm conspiring to exclude its technology from future standardization but that there was also sufficient circumstantial evidence to support a case. The defendants have declined commenting on the matter.
Alcatel is going through tough times with shares having dipped to their current $1.19 price. Wall Street is also slowly losing faith in the company, having shrunk its EPS projections for the current quarter from $0.06 to $0.02 over the last month. ALU is cutting costs in an attempt to stay afloat, laying off 5000 workers after listing net losses of EUR245 million in its Q2 earnings report.
While the jury is still out on this one, Alcatel may just be desperate enough to start trying to pull these kinds of tricks to secure its future. Should TruePosition win the lawsuit, this would certainly be a very considerable blow to Alcatel’s prestige and standing.
Investors should keep an eye out for more news surrounding the subject because whichever way this pans out, the stock will most likely respond with a shift.
