WIREDGOV

The European Commission has opened two formal antitrust investigations into possible abusive behaviour by Qualcomm in the field of baseband chipsets used in consumer electronic devices.

The first will examine whether Qualcomm has breached EU antitrust rules that prohibit the abuse of a dominant market position by offering financial incentives to customers on condition that they buy the baseband chipsets exclusively or almost exclusively from Qualcomm. The second will look into whether Qualcomm engaged in 'predatory pricing' by charging prices below costs with a view to forcing its competition out of the market.

EU Commissioner in charge of competition policy Margrethe Vestager said: "We are launching these investigations because we want to be sure that high tech suppliers can compete on the merits of their products. Many customers use electronic devices such as a mobile phone or a tablet and we want to ensure that they ultimately get value for money. Effective competition is the best way to stimulate innovation.”

European consumers increasingly access the internet through mobile devices – therefore it is important that effective competition takes place for the supply of one of the key components of such devices: Baseband chipsets process communication functions in smartphones, tablets and other mobile broadband devices. They are used both for voice and data transmission.

Qualcomm is the world's largest supplier of baseband chipsets.

The first antitrust investigation focuses on Qualcomm's conditions related to the supply of certain chipsets that comply with 3G (UMTS) and 4G (LTE) standards and are used to deliver cellular mobile connectivity in smartphones and tablets. In particular, the Commission will investigate whether Qualcomm has granted payments, rebates or other financial incentives to its customers on condition that they purchase all or a significant part of their baseband chipsets requirements from Qualcomm, and whether any such behaviour might hinder the ability of rivals to compete.

The second investigation concerns Qualcomm's pricing practices with regard to certain chipsets that comply with 3G (UMTS) standards and are used to deliver cellular mobile connectivity. In particular, the Commission will be assessing whether Qualcomm has engaged in 'predatory pricing' by selling these chipsets at prices below costs, with the intention of hindering its competition from remaining in the market and competing with Qualcomm.

The opening of proceedings means that the Commission will examine the cases as a matter of priority. It does not prejudge the outcome of the investigations.

Background on antitrust investigations

Article 102 Treaty on the Functioning of the European Union prohibits the abuse of a dominant market position which may affect trade between EU Member States. Such abuse may include imposing unfair purchase or selling prices or other unfair trading conditions. The implementation of these provisions is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can be applied by the Commission and by the national competition authorities of EU Member States. The Commission has informed Qualcomm and the competition authorities of the Member States that it has opened proceedings in these cases.

There is no legal deadline to complete inquiries into anti-competitive conduct. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertaking concerned cooperates with the Commission and the exercise of the rights of defence.