The European Commission is considering imposing a 14 percent import tax on mobile phones that feature GPS or TV functionality.
It is thought the tax on GPS-enabled devices is a response to pressure from satnav companies concerned that handsets with GPS are affecting sales of navigation devices.
For TV-enabled handsets, an import tax is already imposed on devices that can be used as a TV with an external tuner, but mobile phones are currently exempt under the 1996 Information Technology Agreement.
"Some mobile phones have many functions these days - personal digital assistant, mobile telephony, a camera, GPS, radio, television. It would be more appropriate to refer to these as 'apparatus with multiple functions, including mobile telephony' as they are more than just 'mobile phones'," said the European Commission.
The tax, which is heavily opposed by the European Information and Communications Technology Association - whose members include Apple, Sony Ericsson, Motorola and LG Electronics, could see prices of GPS and TV-enabled handsets rocket by as much as 25 percent.