EC accuses Qualcomm of chipset market manipulation


Opens investigations against Qualcomm looking into possible abusive behaviour

The European Commission (EC) is investigating whether chipset supplier Qualcomm has been pressurising its customers to buy chipsets for consumer electronic devices from the company.

There are now two formal antitrust investigations open, which are looking into possible abusive behaviour by Qualcomm.

The first is to examine whether Qualcomm has been offering cash to customers to persuade them to buy baseband chipsets from the company, related to the supply of certain chipsets that comply with 3G (UMTS) and 4G (LTE) standards and are used to deliver mobile connectivity in smartphones and tablets.

The investigation will explore whether Qualcomm has breached EU antitrust rules that prohibit the abuse of a dominant market position by granting payments, rebates or other financial incentives to customers on condition that they purchase all or a significant part of their baseband chipsets requirements from the company, and whether any such behaviour might hinder the ability of rivals to compete.

Additionally, the second investigation is looking into whether Qualcomm actually undercut its own prices, known as ‘predatory pricing’, whereby it would have charged prices below its own cost price with the aim of forcing its competition out of the market; an area the EC is always keen to protect. The second investigation concerns Qualcomm’s pricing practices with regard to certain chipsets that comply with 3G (UMTS) standards.

However, in a statement, Qualcomm commented that it was unconcerned about the investigations into its sale of chipsets for mobile devices. It said: “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 EC said that as European consumers increasingly access the internet through mobile devices, it is important that effective competition takes place for the supply of one of the key components of such devices, baseband chipsets. These chipsets process communication functions, for both voice and data, in smartphones, tablets and other mobile broadband devices.

EU Commissioner in charge of competition policy, Margrethe Vestager, stated: “We are launching these investigations because we want to be sure that high tech suppliers can compete on the merits of their products. 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.”



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