European Commission opens investigation into Qualcomm over merger
The European Commission has opened an investigation into the proposed $47 billion acquisition of NXP Semiconductors by semiconductor company Qualcomm.
The in-depth investigation was sparked by the Commission’s concerns that the transaction could lead to higher prices, less choice and reduced innovation in the semiconductor industry.
According to a release from the Commission, the merged entity would have the “ability and incentive” to modify NXP’s current IP licensing practices, in particular in relation to near-field communication (NFC) chips technology.
The Commission is set to investigate whether such conduct, which includes bundling the acquired NFC IP to Qualcomm’s patent portfolio, could lead to anti-competitive effects, such as increased royalties for customers and the exclusion of competitors.
It is also concerned that the merged entity would have the ability and incentive to exclude its rival suppliers from markets through practices such as bundling or tying, while removing competition between companies active in the markets for semiconductors used in the automotive sector.
Commissioner Margrethe Vestager, in charge of competition policy, said: “We use our electronic devices such as mobile phones or tablets every day. As semiconductors are used in practically every electronic device, we are dependent on them in those devices.”
She added that with this investigation, the Commission wants to ensure that consumers “will continue to benefit from secure and innovative products at competitive prices”.
The Commission has until October 17, 2017 to make a decision.
Qualcomm is currently wrapped up in a royalties battle with Apple in the US.
In January, Apple sued Qualcomm, accusing the semiconductor company of abusing its monopoly in the mobile device market to gain unfair royalties from Apple’s inventions.
Qualcomm hit back in April, denying every allegation brought by Apple.
A Qualcomm spokesperson said: "Both companies expected a thorough review process and are working closely with relevant regulators, including the European Commission, to obtain the necessary approvals. Qualcomm has already received clearance from the US Federal Trade Commission."
They added: "Qualcomm continues to expect this transaction to close by the end of 2017."
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