The European Commission (EU) has announced the formal opening of two antitrust investigations on chipmaker Qualcomm.
On Thursday, July 16, EU confirmed that the first investigation will inspect possible abuse of market dominance by Qualcomm. EU officials suspect that Qualcomm lured potential customers by offering financial incentives so these customers would buy Qualcomm products.
The second investigation will examine if the chipmaker was involved in the "predatory pricing" by charging for products below the manufacturing cost, which would force competitors to exit from the market.
Margrethe Vestager, the EU Commissioner who is in charge of competition policy, says that the two antitrust investigations against Qualcomm has been opened as the Commission wants to ensure that companies such as Qualcomm compete in the EU based solely on the virtues 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," added Vestager.
EU has taken its own initiative for conducting the first investigations. However, the probe regarding predatory pricing is a result of a complaint that was directed to the EU.
The EU has declined to reveal the name of the complainant but some market experts believe that Icera, a UK-based semi-conductor company may have made the complaint. In 2010, Icera filed a similar complaint against the chipmaker.
Qualcomm has also responded to the two antitrust EU investigations.
"While we were disappointed to hear this, we have been cooperating and will continue to cooperate with the Commission, and we continue to believe that any concerns are without merit," per a Qualcomm statement.
In February this year, Qualcomm agreed to pay a fine of $975 million that ended a 14-month investigation by the Chinese government into antitrust practices in China.
Qualcomm is not the only company that is facing antitrust probes in the EU. Other well-known companies such as Apple, Starbucks and Amazon have also come in EU's radar over antitrust policies.
EU does not have any deadline to complete its investigation into anti-competitive behavior of companies. However, if a business is found guilty in the EU over market abuse, then that business can be fined as much as 10 percent of their total global earnings.
Photo: Karlis Dambrans | Flickr
