Qualcomm unfazed by EC probes into its sales practices

U.S. chipset manufacturer Qualcomm said it was "unconcerned" about the launch of two antitrust investigations by the European Commission (EC) into its sales tactics, saying it was "disappointed" about the move but would cooperate fully on the matter.

"This step allows investigators to gather additional facts, but it represents neither an expression by the Commission on the merits of the case nor an accusation against the company," Qualcomm said in a statement. "While we were disappointed to hear this, we have been cooperating and will continue to cooperate with the Commission, and we continue to believe that any concerns are without merit."

The EC is investigating whether Qualcomm has been coercing its customers to buy chipsets for consumer electronic devices from the company.

The first probe is examining whether Qualcomm has been offering cash to customers to persuade them to buy baseband chipsets from the company, related to the supply of certain chipsets that comply with 3G (UMTS) and 4G (LTE) standards and are used to deliver mobile connectivity in smartphones and tablets.

The investigation will explore whether Qualcomm has breached EU antitrust rules that prohibit the abuse of a dominant market position by granting payments, rebates or other financial incentives to customers on condition that they purchase all or a significant part of their baseband chipsets requirements from the company, and whether any such behaviour might hinder the ability of rivals to compete.

The second investigation is looking into whether the company actually undercut its own prices, known as 'predatory pricing', whereby it would have charged prices below its own cost price with the aim of forcing its competition out of the market--an area the EC is always keen to protect. This probe concerns Qualcomm's pricing practices with regard to certain chipsets that comply with 3G (UMTS) standards.

The EC said that as European consumers increasingly access the internet through mobile devices, it is important that effective competition takes place for the supply of one of the key components of such devices, baseband chipsets. These chipsets process communication functions, for both voice and data, in smartphones, tablets and other mobile broadband devices.

The 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."

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 EC noted that the opening of proceedings means that it will examine the cases as a matter of priority, and that it does not prejudge the outcome of the investigations.

For more:
- see this press release from the EC
- see this statement from Qualcomm

Related articles:
Nokia Networks, Zain KSA complete Saudi Arabia's first LTE carrier aggregation trial
Report: Saudi Arabia remains largest telecoms market in MEA despite revenue drop
GSA: VoLTE launches reach 16 as operators embrace HD voice benefits
EE says Wembley Stadium LTE carrier advanced demo a first for UK
Qualcomm Europe exec says consolidation and LTE development are fuelling region's revival

Suggested Articles

Qualcomm may finally be moving closer to purchasing NXP. A Beijing official reportedly said the deal is "looking more optimistic now."

T-Mobile says that the integration of the Sprint network will be similar to its integration of MetroPCS and will in some ways be even easier.

After years of fits and starts, Sprint and T-Mobile announced a plan to merge their operations. Here is our complete coverage of this news.