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EU Slaps Qualcomm With Antitrust Charges, Company Accused Of Exclusivity Payments, Predatory Pricing

Dec 10, 2015 02:43 AM EST | By Jean-Claude Arnobit
Qualcomm Inc., european commission, antitrust charges
EU Slaps Qualcomm with Antitrust Charges, Company Accused of Exclusivity Payments and Predatory Pricing
(Photo : Carl Court | Getty Images News)

The European Commission has charged Qualcomm Incorporated with abusing its dominant position in the worldwide markets for 3G and 4G based chipsets, according to a press release issued by the Commission.

The Commission has sent two Statements of Objections to Qualcomm in separate investigations regarding the company exclusivity payments and predatory pricing, a potential breach of EU antitrust rules.

The Commission said that its preliminary conclusions have revealed that Qualcomm illegally paid a major customer for exclusively using its chipsets.

The company has also sold its chipsets below cost with the aim of forcing Icera, a competitor of Qualcomm, out of the market.

Margrethe Vestager, the EU Commissioner in charge of competition policy, said in the press release that The Commission needs to make sure that "European consumers continue to benefit from competition and innovation."

"I am concerned that Qualcomm's actions may have pushed out competitors or prevented them from competing," she said.

The Commission said that consumers are increasingly accessing the internet through their mobile devices, which make the effective competition in the supply of baseband chipsets, one of the key components of mobile devices, more important.

Baseband chipsets process communication functions in smartphones, tablets, and other mobile broadband devices.

The Commission adds that Qualcomm is the world's largest supplier of baseband chipsets.

Dominant companies, under EU antitrust rules, have a responsibility not to abuse their market position by restricting competition.

The accusations of the Commission are the latest antitrust problem that Qualcomm is facing, according to a report from Reuters.

Regulators in the U.S., China, Japan and South Korea are looking into the company's licensing model and its dominant patents in mobile networks and devices.

Qualcomm has also said that the Taiwan Fair Trade Commission has also opened an investigation into its patent license deals.

The company could face a $2.7 billion fine if it is found guilty of breaching the EU's antitrust rules.

Qualcomm is given several months to respond to the Commissions charges of exclusivity payments since 2011 and of predatory pricing between 2009 and 2011.

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