EU’s Antitrust Watchdog Targets QUALCOMM, Inc. (NASDAQ:QCOM) Over Chip Pricing


Dallas, Texas 07/17/2015 (Financialstrend) – QUALCOMM, Inc. (NASDAQ:QCOM) has attracted attention from the European Union’s Competition watchdog over allegations it continues to violate its position as a market leader in mobile devices processors. The antitrust authority has opened two formal investigations related to alleged predatory pricing tactics by the company. There are concerns that the semiconductor giant continues to charge prices below its production costs with the sole intention of squeezing competition out of business.

Allegations against Qualcomm

QUALCOMM, Inc. (NASDAQ:QCOM) is also being investigated on allegations that it offered some of its customers some discounts on condition they buy baseband chips exclusively from it.  Baseband chips are normally used to manage cellular connections in tablets and smartphones.

QUALCOMM, Inc. (NASDAQ:QCOM) is the biggest supplier of baseband chips having accrued a substantial amount of market share in the delivery of chips used in 4G LTE network. The company has already forced out the likes of Texas Instruments Inc and Broadcom in the baseband business thanks to its market leading position.

The company has also faced off with antitrust regulators in China on violating its position in the chips business. The US Federal Trade Commission is also investigating the company’s licensing business.

Looming Fine

If found guilty of the allegations under investigations, QUALCOMM, Inc. (NASDAQ:QCOM) could be handed a 10% fine on all its annual revenue. The company will also be asked to change its practices in the region if it is to be allowed to continue operating.

Investigations seem to have been prompted by concerns raised by Icera, a baseband technology company based in the UK. QUALCOMM, Inc. (NASDAQ:QCOM) is not the only company that finds itself under investigation by the European Union’s antitrust agency. Antitrust chief Margrethe Vestager has already filed formal charges against Google Inc. (NASDAQ:GOOGL) over concerns that the company continues to violate its positions as a search giant., Inc. (NASDAQ:AMZN) is also under investigations in the region over concerns it might have raised barriers to competition in the e-commerce space.