Word comes out of Europe this morning that the European Union’s executive body, the European Commission, will be opening up an anti-trust investigation into Qualcomm.

The Commission has investigated Qualcomm once before on potential FRAND patent violations, ultimately opting to close the investigation with no further action taken. This time the commission is investigating Qualcomm on two separate issues.

The first issue being investigated is over whether Qualcomm offered financial incentives to customers who used Qualcomm chips exclusively or near-exclusively, which would serve to lock out the competition in an anti-competitive manner. The second issue is whether Qualcomm engaged in outright predatory pricing, selling their chips below cost in order to dive out competition.

These investigations come after an extended period of success for Qualcomm, who for most the 28nm generation has been the leading SoC supplier for Android devices thanks to a combination of early success with LTE basebands and strong overall performance. The European Commission in turn believes that there may have also been anti-competitive aspects to this success, with Qualcomm engaging in practices to shut-out the competition via unfair pricing.

Pricing-related complaints are some of the hardest to prove in anti-competitive investigations, as a regulator needs to prove that any kind of low pricing comes from natural competition and not from prohibited attempts to rig the market. So the fact that the European Commission has publicly announced an investigation on these matters could very well mean the Commission has their work cut out for them, or that they believe they have strong enough evidence to bring their investigation to the public stage.

Qualcomm for their part is denying that they have engaged in any anti-competitive practices, stating that the Commission’s concerns are “without merit.” That said, this comes just 5 months after Qualcomm was found guilty by Chinese regulators of engaging in anti-competitive patent bundling in China, a finding that cost Qualcomm $975 million in fines. Any EU fine, by comparison, could be up to 10% of Qualcomm’s global revenue, along with any structural/behavioral changes demanded by regulators.

Source: Reuters

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  • blackoctagon - Sunday, July 26, 2015 - link

    The European Commission goes after as many antitrust cases as it thinks will yield money. Fines against cartels and monopolies who abuse their dominant position are a significant source of the Commission's revenue. Reply
  • masouth - Friday, July 17, 2015 - link

    "...as a regulator needs to prove that any kind of low pricing comes from natural competition and not from prohibited attempts to rig the market."

    Maybe I just need more sleep and I am reading it wrong but isn't that backwards? Doesn't the regulator need to prove that the pricing did NOT come from natural competition and DID come from prohibited attempts to rig the market.
    Reply

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