AH SnapDragon Qualcomm 1.7

Possible Antitrust Probe by EU into Qualcomm

August 26, 2014 - Written By Cory McNutt

With competition heating up in the mobile world, complaints and court cases seem to be the norm for so many companies – one of the longest drawn out and most publicized battles is between powerhouses Samsung and Apple over patent disputes.  Another potentially devastating complaint is against the world’s number one mobile chip designer – Qualcomm, which makes the ever-popular Snapdragon series of processors.  The case is a four-year-old antitrust complaint that the European Union (EU) is investigating. This comes at a bad time for Qualcomm, which is seeking relief of another investigation – a China pricing scheme into monopoly practices.

In an exclusive report, Reuters explains that the case from 2010 came from British cell phone chipmaker Icera, which was acquired by Nvidia in 2011, in which they accuse the U.S. chipmaker of anti-competitive behavior – details of which were never made public.  However, a person familiar with the issue said that Icera accused Qualcomm of using patent-related incentives and manipulative pricing in order to discourage customers from buying from Icera.

After these years have passed, many though the lawsuit had been moved off the EU’s agenda, but it is not unusual for the EU competition authority to take several years to develop a case.  After the EU fined chipmaker Intel 1.1 billion euros for its abuse of power by dominating the market, the regulators decided to fast track the Qualcomm case.  One source, who declined to be named said, “The Commission may open a case after the summer.”  Qualcomm and the EC Commission spokesperson for the competition policy, Antoine Colombani, refused to comment – but cost-wise, fines can go as high as 10-percent of global revenues.

Previously in 2010, Qualcomm was hit by both Swedish tech giant Ericcson and U.S. chip and component maker, Texas Instruments, with complaints to the EU about the company’s business practices – it was dropped after they both withdrew their complaints. If you follow Qualcomm’s history you will see that they are no stranger to the inside of courtrooms and certainly familiar with complaints against them for unfair business tactics – they may be in a position that they are that good that other companies just like to come after them, or maybe there is something to the way they conduct business.