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E.U. Aims Anti-Competition Complaint At Qualcomm

December 8, 2015 - Written By David Steele

Qualcomm is a business under pressure. They are currently the largest mobile chipset with customers including the big name manufacturers such as Apple, HTC and Samsung, where they supply a mix of chips including modem basebands (to Apple) and System-on-Chips (to much of the rest of the market). Qualcomm’s chipsets have been notable for a few reasons, including how Qualcomm use built-in GPUs (the Adreno series), integrated mobile network modems, Wi-Fi and location sensors, plus their own customized application core. However, for 2015 the Qualcomm Snapdragon 810 did not sell as well as the business had hoped as they lost the Samsung flagship contract. Qualcomm had to reduce their spend on research and development at a time when the business has faced some anti-competition investigations within the market.

Earlier in the summer, the European Union started an investigation into the largest mobile chipset manufacturer in the world today, Qualcomm. Today, the EU antitrust regulators accused Qualcomm with abusing its dominant market position by hindering rivals, such as MediaTek and Samsung. This is the latest in a series of antitrust cases that the company has fought from around the world including the United States of America, Japan and South Korea – regulators are looking at Qualcomm’s licensing model and dominance in mobile networking and device markets. The European Union claims that Qualcomm may have paid a customer for exclusively using its chipsets, an illegal business transaction. Another claim is that Qualcomm deliberately sold chipsets at below cost price with the intention of forcing a competitor out of the market – a tactic known as ‘predatory pricing’. This particular complaint was raised by British handset manufacturer, Icera, which was competing in the smartphone chipset market. Icera was subsequently bought by NVIDIA Corporation.

European Competition Commissioner, Margrethe Vestager, said this on the matter: “I am concerned that Qualcomm’s actions may have pushed out competitors or prevented them from competing.” Qualcomm has been given a deadline of several months to respond to the charge of predatory pricing between 2009 and 2011, and of the exclusive deals since 2011. Qualcomm’s General Counsel, Don Rosenberg, responded with a statement: “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.” If found guilty, the fine could reach into the billions – up to ten percent of its 2014 worldwide revenue, or $2.7 billion. Earlier in the year the business paid almost a billion dollars to end the Chinese anti-competition practice.