EC accuses Qualcomm of unfair competition with rivals - Mobile World Live

EC accuses Qualcomm of unfair competition with rivals

08 DEC 2015

The European Commission (EC) said US chipmaker Qualcomm illegally paid a major customer to exclusively use its chipsets and sold its products below cost.

Europe’s antitrust regulator set out the charges in “two statements of objections”, which follows the launch of separate probes in July over alleged “abusive behaviour” by the company.

The EC informed Qualcomm of its “preliminary conclusions that the company illegally paid a major customer for exclusively using Qualcomm chipsets and sold chipsets below cost with the aim of forcing its competitor Icera out of the market”, actions representing a potential breach of EU antitrust rules.

But the company claimed it previously disclosed the matters. One statement of objections concerns the supply of Qualcomm’s chipsets to a single customer under an existing agreement, it said.  The other one covers Qualcomm’s sales to two customers from 2009 through 2011 of three chipsets incorporated into dongles that were used to provide cellular connectivity for laptops.

“Qualcomm has been cooperating with the Commission since the outset of these matters, and now that we’ve received the Statements of Objections, we welcome the chance to formally respond,” said Qualcomm general counsel and executive vice president, Don Rosenberg.

“We look forward to demonstrating that competition in the sale of wireless chips has been and remains strong and dynamic, and that Qualcomm’s sales practices have always complied with European competition law,” he added.

EC comment
“I am concerned that Qualcomm’s actions may have pushed out competitors or prevented them from competing,” commented Margrethe Vestagar, the EC commissioner in charge of competition policy.

The commission said it had issued Qualcomm with the charges as part of its separate investigations, outlining the Commission’s preliminary view that the company had abused “its dominant position in the worldwide markets for 3G and 4G baseband chipsets.”

According to reports, if the charges are proved, the company could face fines of up to 10 per cent of its global annual revenue and be forced to change its business practises, a move which could also see it avoid the fines.

Taiwan troubles
Separately, Qualcomm admitted that the Taiwan Fair Trade Commission has requested information and initiated an investigation into whether its patent licensing arrangements violate the country’s fair trade law. “This matter is in its early stages,” stated Qualcomm.

Last month South Korea’s Fair Trade Commission (KFTC) alleged that Qualcomm violated local competition law in licensing some of its technology and recommended fining the company and demanding it modify its business practices.

And at the beginning of the year Qualcomm was fined almost $1 billion by China’s antitrust regulator, with the firm agreeing to modify its licensing practices and reduce royalties to satisfy the government’s anti-competitive ruling.

Qualcomm joins a growing list of US technology companies that have faced EU antitrust action, which include Google, Microsoft and Intel.

The company has three months to respond to today’s allegations over exclusivity payments, and four months with regards to predatory pricing objections.


Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

Read more