EU Investigating Qualcomm for Violating Antitrust Rules

Did the maker of smartphone and tablet chipsets abuse its dominant market position?
Katie Kuehner-HebertJuly 16, 2015
EU Investigating Qualcomm for Violating Antitrust Rules

The European Commission on Thursday opened two antitrust investigations into “possible abusive behavior” by U.S. chip maker Qualcomm — specifically, whether Qualcomm breached European Union antitrust rules that prohibit the abuse of a dominant market position. Qualcomm is accused of offering financial incentives to customers on condition that they buy baseband chipsets exclusively or almost exclusively from Qualcomm.

The commission will also look into whether Qualcomm engaged in “predatory pricing” by charging prices below costs with a view to forcing its competition out of the market.

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snapdragon_800_chip“We are launching these investigations because we want to be sure that high-tech suppliers can compete on the merits of their products,” EU Commissioner in charge of competition policy Margrethe Vestager said in a press release. “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. Effective competition is the best way to stimulate innovation.”

Qualcomm said in a statement to the The New York Times that it was disappointed that European authorities had opened the investigations, but that the company would continue to work with the region’s antitrust officials.

“We continue to believe that any concerns are without merit,” Qualcomm said in the statement.

The EU’s investigation into Qualcomm’s activities is the latest in a number of recent competition inquiries that have targeted United States technology giants, according to the Times. This year, Vestager brought formal antitrust charges against Google over suspicions that it favored some of its own online search services over those of its rivals. Google has until the middle of August to respond to the antitrust charges, which follow a four-year investigation into the company.

Vestager is also looking into whether tax practices in Ireland and Luxembourg gave preferential treatment to Apple and Amazon.

“While European officials have emphasized that these investigations have not unfairly focused on American companies, many industry executives have accused the region’s policy makers of targeting the global giants in a bid to help European rivals — many of which have struggled to compete globally — bolster their market positions across the 28-member bloc,” the Times wrote.