EU Hits Qualcomm With Two Antitrust Investigations

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US chipmaker accused of ‘predatory pricing’ amid claims of abusing semiconductor market dominance

Qualcomm has been hit with two EU charges amid accusations that it tried to price rivals out of the mobile device industry.

The US chipmaker is to be investigated under claims that it abused its position as a leader in the production of semiconductors for the lucrative consumer market.

“We are launching these investigations because we want to be sure that high-tech suppliers can compete on the merits of their products,” EU Antitrust Commissioner Margrethe Vestager said in a statement. “Many customers use electronic devices such as a mobile phone or a tablet and we want to ensure that they ultimately get value for money.”

Overcharged?

qualcomm snapdragon dragon and chipThe first investigation will look at whether Qualcomm moved to influence customers by offering financial incentives to buy baseband chipsets for their products exclusively or almost exclusively from Qualcomm.

The second will examine if Qualcomm ever tried to undercut its competitors by charging prices below costs, a practice known as ‘predatory pricing’.

“We were informed that the European Commission has taken the procedural step of “initiating proceedings” against Qualcomm with regard to the two ongoing investigations into Qualcomm’s sale of chipsets for mobile devices,” Qualcomm said in a statement.

“This step allows investigators to gather additional facts, but it represents neither an expression by the Commission on the merits of the case nor an accusation against the Company.  While we were disappointed to hear this, we have been cooperating and will continue to cooperate with the Commission, and we continue to believe that any concerns are without merit.”

The news marks the second time this year that Qualcomm has been hit with a significant antitrust charge.

It was engaged in a similar investigation by Chinese authorities for well over a year following claims that the company reportedly charged higher prices to Chinese companies than in other countries, claims which could land Qualcomm with a $1bn fine.

The San Diego-based company, which produces the chipsets for many of the world’s leading Android smartphones and tablets, as well as some key components for Apple’s devices, also faced pressure from one of its largest shareholders earlier this year to split up some of its most profitable divisions, including its lucrative Snapdragon chip-making business.

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