European Union Opens Up Antitrust Investigation Into Qualcomm
by Ryan Smith on July 16, 2015 8:40 AM EST- Posted in
- Mobile
- Qualcomm
- Smartphones
- SoCs
- Legal
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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Death666Angel - Thursday, July 16, 2015 - link
The EU is no country.Drumsticks - Thursday, July 16, 2015 - link
As people mentioned, you can't really be guilty of anti trust when you only have a miniscule percentage of the market. That would make it basically impossible for new people to enter.Kevin G - Thursday, July 16, 2015 - link
It really wouldn't surprise me if Qualcomm was selling chips below cost but that also needs a bit of context. They have OEMs order designs only to change their mind about bringing a handset to market. Qualcomm is left with surplus inventory. Selling this excess below cost doesn't bother me too much as it is wiser to get some money rather than no money. However, this doesn't absolve Qualcomm of the claims being made but it does make second claim about predatory pricing hard to prove.Wagobert - Thursday, July 16, 2015 - link
A comment from an EU citizen:We are unable to compete on technology, so we prosecute American tech companies (Microsoft/Intel/Google/etc).
Why can't we create as many startups as USA, Korea or Israel?
There are many reasons - let's pick a few:
1. we are used to the socialist nanny state doing everything for us;
2. we tend to work shorter hours (33 hour work week in France?);
3. we have bizarre Brussels rules, e.g. on what google must censor in web pages and cookie warnings must be included;
4. in places like France, we have 30% corporation tax, followed by 70% income tax (top bracket) followed by 20% sales tax - i.e. money is just drained away by the state.
Buk Lau - Friday, July 17, 2015 - link
ARM, the company that owns the ISA that 95% of the mobile market uses, is a British company, so I don't know what this guy's thinkingDeelron - Friday, July 17, 2015 - link
To be fair (neither agreeing or disagreeing with his premise), one (or a few) companies doesn't negate being "unable to compete on technology" (granted it's a vague premise) or the "can't create as many startups as USA, Korea or Israel".nils_ - Friday, July 24, 2015 - link
I think a large part of the problem here is that the EU commission is remarkably efficient, having done away with the democratic process altogether. That's how a lot of nonsense gets pushed through that you simply have to be aware of when starting a company. You can't just start a company with a a little family money and a good idea like so many of the US startups because you'll already need a few lawyers and possibly translators etc. just to get started.That being said, since most of the people are employees, and most of them don't work for large corporations I think for the average worker many European countries are a lot better with regards to quality of life. I get paid by the hour, so I work as long as I have to but for most people you gotta ask yourself what is the value in putting in 50-100h a week for a measly salary and little other benefit?
And the taxes in the US can be bad as well, not as draconian as France (although who makes a million a year anyways?) but still if you take state and federal taxes and notice how little it buys you in government services (other than a large military) you may actually end up paying more than you pay in some EU countries.
blackoctagon - Sunday, July 26, 2015 - link
"the EU commission is remarkably efficient, having done away with the democratic process altogether"Can we please keep political invective out of this discussion? Especially if you're not going to back up such an outrageous statement. Everything the European Commission does, it does because democratically-elected Member States have given it the power to do so.
nils_ - Sunday, July 26, 2015 - link
Of course it's a bit of hyperbole, but I certainly didn't vote for ceding rights to the European commission since I wasn't even alive when these decisions were made. The individual citizens' vote has very little influence on the composition of a very important body of government since you don't get to vote in all member states and even then whoever you voted for might not end up in a position to decide. That may satisfy your definition of democracy but not mine.siliconwars - Saturday, July 25, 2015 - link
Except that these companies have been found guilty of every anti-trust crime in the book, in all jurisdictions on earth.