The European Commission on Tuesday filed antitrust charges against chipmaker Qualcomm Inc, the latest in a growing number of competition investigations targeting US technology companies.
Europe’s antitrust officials in Brussels said that Qualcomm, one of the world’s largest makers of chips, had abused its dominant market position in the region by offering financial incentives to smartphone and tablet manufacturers that agreed to buy equipment solely from Qualcomm.
Qualcomm was also accused of unfairly setting prices below manufacturing costs to force competitors out of the market.
The company’s chips are widely used in smartphones and other mobile devices that have become central to many people’s lives.
“I am concerned that Qualcomm’s actions may have pushed out competitors or prevented them from competing,” EU Commissioner for Competition Margrethe Vestager said 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.”
Qualcomm said that it had been cooperating with European authorities and welcomed the opportunity to respond to the charges.
“We look forward to demonstrating that competition in the sale of wireless chips has been and remains strong,” Qualcomm general counsel Donald Rosenberg said in a statement.
Qualcomm has until April next year to respond to the European charges.
If found to have breached Europe’s antitrust rules, the chipmaker could face fines amounting to about 10 percent of its annual global revenue, which was US$26.49 billion last year, and could be required to change some of its business practices.
However, in previous European antitrust cases, companies typically have not been asked to pay such high financial penalties.
The European Commission opened its investigation into potential wrongdoing by Qualcomm in July.
The San Diego, California-based company has been the focus of previous competition investigations.
This year, Qualcomm agreed to pay a US$975 million fine for breaching China’s antimonopoly law. As part of that deal, the firm said it would offer a significant discount in China on licenses for some of its communications systems for high-speed data in smartphones.
European policymakers ended a two-year inquiry in 2009 after failing to find evidence that Qualcomm had charged excessive royalties for access to its patents.
However, in 2010, Icera Inc, a British chipmaker owned by Nvidia Corp, filed a new complaint, accusing Qualcomm of using unfair financial incentives to attract new customers.
That complaint formed the basis for the European Commission’s latest antitrust investigations into Qualcomm, according to a statement from antitrust officials.
Meanwhile, Qualcomm on Tuesday said that its patent licensing arrangements are being probed by the Fair Trade Commission (FTC).
Qualcomm said it “believes it complies” with Taiwanese law and would cooperate.
The FTC’s probe into Qualcomm, which started in February, is still under way, FTC Vice Chairman Chiu Yung-ho (邱永和) said in a telephone interview on Tuesday, but declined to comment further.
Additional reporting by Bloomberg
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