Qualcomm under EU antitrust investigation over 5G chips
US chipmaker Qualcomm is facing another antitrust headache in the form of a European Commission investigation into its position in the 5G chip market.
The investigation follows more than €1 billion in EU antitrust fines imposed on Qualcomm over the past two years related to earlier generations of wireless technology.
Qualcomm disclosed the probe in a filing at the Securities Exchange Commission yesterday, February 5.
According to the filing, the European Commission sent Qualcomm a notice in early December informing it of the investigation and requesting information.
Qualcomm said it was currently “in the process of responding” to the request.
The news comes as Qualcomm tries to fend off a US district court ruling which found it to be in breach of US competition law over its chip licensing practices.
Last May, the US District Court for the Northern District of California sided with the US Federal Trade Commission (FTC), which said Qualcomm’s “no licence, no chip” policy was illegal.
Qualcomm’s chips allow devices such as smartphones to connect to wireless networks.
The FTC said that Qualcomm had extracted excessively high royalties from tech companies such as Apple due to its dominance in the 3G and 4G markets.
It warned the court that, unless Qualcomm was brought to task over its licensing practices, it would be able to gain a similarly dominant foothold in the market for 5G, the latest generation of wireless technology.
Qualcomm is currently appealing against the ruling, but tech companies have urged the US Court of Appeals for the Ninth Circuit to stand by the decision.
The details of the European Commission’s investigation have not yet been revealed, but it relates to whether Qualcomm leveraged its position in the 5G chip market.
If a violation is found, the Commission may impose a fine of up to 10% of Qualcomm’s annual revenues, and/or injunctive relief prohibiting any business practices found to be in breach of competition law.
“It is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the [commission]. We believe that our business practices do not violate the EU competition rules,” the Qualcomm filing stated.
The Commission has already imposed more than €1 billion worth of fines on Qualcomm for violating EU competition law over the past two years.
Last July, it announced a fine of €242 million for pricing a competitor out of the 3G chip market. According to EU regulators, Qualcomm sold chips below cost to Chinese smartphone makers Huawei and ZTE with the intention of eliminating British rival Icera.
That followed a penalty of €997 million in January 2018, after the Commission found that Qualcomm had paid a customer not to buy from rivals.
The FTC had also accused Qualcomm of awarding significant discounts to companies such as Apple in exchange for market exclusivity.
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