Chipmaker Qualcomm is the latest U.S. company to be accused of market abuse and anticompetitive activities by the European Commission. The EC announced on Tuesday that it had filed antitrust charges against the Qualcomm.
The European regulators allege that Qualcomm, a large global manufacturer of semiconductor chips used in smartphones and tablets, has been abusing its dominant market position in Europe by offering financial incentives to mobile device makers that agreed to use the firm as their sole supplier.
Details on EC charges against Qualcomm
The EC also claimed that Qualcomm unfairly set prices below manufacturing costs to try and force other competitors out of the market.
Qualcomm released a statement on Tuesday noting it was cooperating with the European regulatory authorities and looked forward to the chance to respond to the false charges.
Analysts point out that the chipmaker has until April to offer a response to the EC charges. Violations of the EC’s antitrust rules can result in fines as high as 10% of a firm’s annual global revenue ($26.49 billion in 2014). The firm could also be ordered to change its business practices. In earlier EC antitrust cases, firms that cooperated have not been asked to pay this kind of large financial penalty.
Of note, the EC began its investigation into antitrust violations by Qualcomm in mid-summer.
The chip-making giant is a known violator of antitrust laws.
After a two-year probe, Qualcomm paid a $975 million fine for violating China’s antimonopoly law earlier this year. In its settlement with Chinese regulators, the company agreed to offer a discount in China on licenses for many of its communications systems for high-speed data.
Statements from EC and Qualcomm
“I am concerned that Qualcomm’s actions may have pushed out competitors or prevented them from competing,” Margrethe Vestager, head EC antitrust regulator, noted in a statement on Tuesday. “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.”
In an email, Qualcomm’s general counsel, Donald J. Rosenberg, wrote: “We look forward to demonstrating that competition in the sale of wireless chips has been and remains strong,”