European regulator launches two antitrust investigations on Qualcomm

The European regulator has launched two formal antitrust investigations against Qualcomm Inc, to find out whether the world's largest chipmaker has deployed predatory pricing for certain chipsets and offered unfair rebates to customers in order to force competition out of the market.

The first probe by the European Commission (EC) will examine whether Qualcomm has breached EU antitrust rules that prohibit the abuse of a dominant market position by offering financial incentives to customers on condition that they buy the baseband chipsets exclusively or almost exclusively from Qualcomm.

The second probe will look into whether Qualcomm engaged in 'predatory pricing' by charging prices below costs with a view to forcing its competition out of the market.

EC Commissioner Margrethe Vestager, said, "We are launching these investigations because we want to be sure that high tech suppliers can compete on the merits of their products. Many customers use electronic devices such as a mobile phone or a tablet and we want to ensure that they ultimately get value for money. Effective competition is the best way to stimulate innovation.''

The European probe comes only five months after Qualcomm agreed to pay a record $975 million to settle an anti-trust case in China.

Qualcomm is the world's largest supplier of baseband chipsets, which are used in smartphones, tablets and other mobile devices.

The first antitrust investigation by the EC will focuses on Qualcomm's conditions related to the supply of certain chipsets that comply with 3G and 4G standards and are used in smartphones and tablets.

''In particular, the EC will investigate whether Qualcomm has granted payments, rebates or other financial incentives to its customers on condition that they purchase all or a significant part of their baseband chipsets requirements from Qualcomm, and whether any such behaviour might hinder the ability of rivals to compete,'' the EC said in a statement.

The second investigation concerns Qualcomm's pricing practices with regard to certain chipsets that comply with 3G standards. In particular, the EC said that it will be assessing whether Qualcomm has engaged in 'predatory pricing' by selling these chipsets at prices below costs, with the intent of hindering its competition from remaining in the market.