U.S. Chip Giant Qualcomm Faces EU Antitrust Investigation


U.S. Chip Giant Qualcomm Faces EU Antitrust Investigation

Qualcomm, an American icon and world leader in the manufacturing of chips necessary for smartphones, tablets and cellphones is now the topic of not one, but two investigations, for the potential misuse of its market dominance.

On Thursday, it was announced that two investigations have been opened by the European Commision looking into chipmaker Qualcomm Inc.’s possible misuse of market dominance, just a recent string of tax and antitrust inquiries into several major U.S. companies.

The initial investigation will look into whether or not Qualcomm, leader in the market of chips used for the transmission of voice and data in smartphones, other mobile devices and tablets, offered monetary incentives to customers on the grounds that they purchased exclusively or almost so from Qualcomm.

The second investigation will look into whether or not Qualcomm took part in “predatory pricing” with charging lower than cost in an attempt to force competitors from the market.

"We are launching these investigations because we want to be sure that high-tech suppliers can compete on the merits of their products," according to European Competition Commissioner Margrethe Vestager.

"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."

Other U.S. companies that have shown up on the EU’s radar for potential market abuse are Google, Apple and Starbucks.

Qualcomm stated their disappointment in hearing of the EU investigations.

"We have been cooperating and will continue to cooperate with the Commission, and we continue to believe that any concerns are without merit," Qualcomm stated.

This year, Qualcomm was able to pay a $975 million fine and put an end to a year long investigation by the Chinese government into potential anti-competitive practices..

Companies that the EU does find to be guilty of abusing the market can potentially be fined as much as 10 percent of their worldwide earnings. No specific deadline is set for completing an investigation into conduct that is anti-competitive.

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