Qualcomm on brink of EC probe into chip licensing

Qualcomm faces a fine of up to $2.5 billion (€1.8 billion) if found guilty of monopolistic practices in the European mobile chip market.

Qualcomm President Derek Aberle

Qualcomm President Derek Alberle

The European Union is preparing to investigate a four-year-old claim by Icera, a UK chipmaker now owned by Nvidia, that Qualcomm acted anti-competitively when selling its mobile chips in Europe. Sources told Reuters the EU could open the investigation after the summer, after being spurred to revisit the 2010 complaint by a recent similar ruling against Intel.

In the Intel case, the U.S. company was fined a record €1.1 billion for abusing its dominant market position following an investigation in 2009. The General Court, Europe's second-highest court, in June rejected an Intel appeal and upheld the fine.

Icera alleges that Qualcomm used access to its patents as an incentive for prospective customers in the EU, and priced its chipsets to exclude competitors from the market.

The EU dropped a previous investigation into Qualcomm in 2010 after the complainants--Ericsson and Texas Instruments--backed down, Reuters said.

Qualcomm is also currently battling a probe into its business practices in China, and lost a similar case in South Korea in 2009 relating to its CDMA chipsets. The Chinese case could be drawing to a close, however, as Qualcomm last week pledged to improve its pricing practices in the country during meetings between its president Derek Aberle and officials from China's National Development and Reform Commission (NDRC), sister publication FierceWireless reported.

In its fiscal third quarter 2014 results--covering the three months to June 29--Qualcomm warned that some of its Chinese customers may hold off signing new licences while the NDRC investigation is ongoing. The chip maker also said some Chinese vendors are failing to disclose all sales of 3G and LTE devices, in a potential breach of licensing terms.

Qualcomm estimated that 1.3 billion 3G and LTE devices featuring its chips will ship in calendar year 2014, but said the number of shipments reported to it are likely to be in the range of 1.04 billion to 1.13 billion.

For more:
- see this Reuters report
- see Qualcomm's fiscal Q3 earnings [PDF]

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