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EU To Investigate Qualcomm For Monopolistic Trade Practices

July 16, 2015 - Written By Kishalaya Kundu

Reports coming out of Europe on Thursday suggest that the European Commission, the executive body of the EU, is all set open two separate anti-trust investigations into Qualcomm to probe whether the chip-maker indulged in unfair trade practices to illegally stifle competition. The first of the investigations will attempt to examine whether Qualcomm allegedly offered “financial incentives” to customers for using its chips exclusively, thereby breaching EU antitrust regulations. The other investigation will focus on whether the American company had engaged in “predatory pricing” by selling their 3G chips below cost price to drive its competitors like MediaTek etc. out of the market. Qualcomm Inc., based out of San Diego, CA, is the world’s largest supplier of baseband chipsets that make mobile devices like smartphones and tablets capable of wireless communications.

Qualcomm’s business practices have been questioned in the past as well, and the company has already been investigated for allegedly engaging in monopolistic trade practices. Earlier this year, the company was made to pay fines to the tune of $975 million by authorities in China after being found guilty of anti-competitive patent-bundling. If found guilty this time around, Qualcomm will have to cough up fines of up to 10 percent of its global yearly revenue, according to reports. In a statement released to the media, the EU commissioner in charge of competition policy Ms. Margrethe Vestager said, “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”.

Qualcomm meanwhile, is steadfastly protesting its innocence, saying that it is “disappointed” to know about the impending investigations and that it is sure it has nothing to hide. In a statement released on Thursday, the company says, “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 company has also attempted to paint its accusers as opportunists, by claiming that “It is especially ironic that the complaints are being lodged by suppliers who voluntarily entered into license agreements with Qualcomm. … This action appears to be nothing more than an attempt by these licensees to renegotiate their license agreements by seeking governmental intervention”.