EU Officially Accuses Qualcomm Of 'Predatory Pricing' To Thwart Rivals

The European Commission (EC) charged Qualcomm with violating antitrust rules in the European Union (EU). The EC said that Qualcomm abused its powers to thwart rivals by paying OEM customers to buy chips exclusively from the company.

Earlier this year, Qualcomm was found guilty with violating antitrust laws in China as well, and it was forced to pay a record $1 billion fine. China accused Qualcomm of maintaining royalty rates for 3G and 4G technologies that were too high. The Chinese government demanded that alongside the $1 billion fine, Qualcomm would also have to lower its license prices for its patents by a third.

Qualcomm is also being investigated for its licensing prices in Japan and South Korea. The EU also investigated Qualcomm for unreasonably high licensing prices in 2009, but it ended up dropping that investigation.

This time, the antitrust accusations in the EU are different and much more damning for the company. The EU’s competition enforcer said that Qualcomm may have illegally paid a major customer for exclusively using its chips. It also said that Qualcomm sold chipsets below cost to drive competitors out of the market, which is a strategy that is called "predatory pricing."

The predatory pricing accusation came from Icera, a maker of software0defined radio technology. The company was later acquired by Nvidia but could never successfully break into the modem market, which is why Nvidia later decided to sell it.

Qualcomm rebutted the accusations, saying that its tactics haven’t hurt competition in the wireless chip market and that it has always complied with EU laws:

"Qualcomm has been cooperating with the Commission since the outset of these matters, and now that we've received the Statements of Objections, we welcome the chance to formally respond," said Qualcomm general counsel and executive vice president, Don Rosenberg. "We look forward to demonstrating that competition in the sale of wireless chips has been and remains strong and dynamic, and that Qualcomm's sales practices have always complied with European competition law," he added.

If found guilty, Qualcomm could pay as much as a $2.7 billion fine, or the equivalent of 10 percent of its 2014 global revenues.

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Lucian Armasu joined Tom’s Hardware in early 2014. He writes news stories on mobile, chipsets, security, privacy, and anything else that might be of interest to him from the technology world. Outside of Tom’s Hardware, he dreams of becoming an entrepreneur.

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