The European Commission has formally filed charges, “Statements of Objections,” alleging chipmaker Qualcomm has violated EU rules designed to prevent anti-competitive activity. The claims allege Qualcomm paid a major customer to exclusively use its chipsets in their smartphones and that Qualcomm sold chipsets below cost for the express purpose of forcing a competitor out of the market.
The EU Commissioner heading up the action, Margrethe Vestager, issued the following statement regarding Qualcomm:
“Many consumers enjoy high-speed internet on smartphones and other devices – baseband chipsets are key components that make this happen. I am concerned that Qualcomm’s actions may have pushed out competitors or prevented them from competing. We need to make sure that European consumers continue to benefit from competition and innovation in an area which is at the heart of today’s economy.”
The European Commission alleges that payments to a smartphone manufacturer to use its chips exclusively started in 2011. This action harmed competition in the market for UMTS and LTE baseband chipsets. The European Commission says the exclusivity clause is still in effect although they do not name which smartphone manufacturer is involved.
The second allegation concerns moves by Qualcomm to source its chips at below cost in order to head off Icera. The illegal pricing is alleged to have occurred between 2009 and 2011 when Icera is believed to have developed some better technology impacting data rate performance that would have harmed Qualcomm’s market share.
The European Commission notes in their press release that Qualcomm is the world’s largest supplier of baseband chipsets. Despite that position, Qualcomm has recently been buffeted by changes in the market, going so far as to plan a reduction in the number of employees. Qualcomm is also starting to face pressure from smartphone manufacturers like LG and Sony moving chip production in-house.
Qualcomm has 90 days to respond to the allegations regarding the exclusivity agreement and 120 days to respond to the predatory pricing claims. The investigations commenced this past July.
source: European Commission
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