Issuing a statement of objections is a formal step in EC investigations into suspected violations of European Union antitrust rules. The latest move follows on from the announcement of two investigations in July 2015 (see Qualcomm’s sales practices are under scrutiny).
It signals that the EC has come to preliminary conclusion that Qualcomm may have illegally paid a major customer for using its chipsets exclusively and sold chipsets below cost with the aim of forcing its competitor Icera Semiconductor out of the market. Icera has since been acquired by Nvidia Inc.
The first statement of objections says that Qualcomm has since 2011 paid significant amounts to a major smartphone and tablet computer company on condition that it exclusively uses Qualcomm baseband chipsets in its smartphones and tablets. The company was not named in a European Commission press release but the exclusivity contract is still in force.
Qualcomm has 3 months to respond with regards to the exclusivity payment and 4 months with regards to the allegation of predatory pricing.
“Qualcomm has been cooperating with the Commission since the outset of these matters, and now that we’ve received the Statements of Objections, we welcome the chance to formally respond,” said Qualcomm general counsel and executive vice president, Don Rosenberg. “We look forward to demonstrating that competition in the sale of wireless chips has been and remains strong and dynamic, and that Qualcomm’s sales practices have always complied with European competition law.”
If the charges are upheld the European Commission could levy fines of up to a tenth of Qualcomm’s annual sales for each offence.
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