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."
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox
Today's top stories:
The Beverly Hills Hotel sued for using photo of actress
Federal Circuit outlines scope of estoppel at PTAB
Levi Strauss sues counterfeiter after customs operation
WIPR survey: Drake sampling case could have far-reaching consequences
Already registered?
Login to your account
If you don't have a login or your access has expired, you will need to purchase a subscription to gain access to this article, including all our online content.
For more information on individual annual subscriptions for full paid access and corporate subscription options please contact us.
To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.
For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Adrian Tapping at atapping@newtonmedia.co.uk