The EU Commission launched two antitrust investigations into possible abuse of market dominance by Qualcomm. One of the issues concerns whether Qualcomm offered financial incentives to the company's customers to buy its Snapdragon chips exclusively, while the other is about whether Qualcomm sold its chips below the manufacturing cost to drive competition out of the market. Although both are serious accusations, the investigations could take years to resolve.
EU Commissioner in charge of competition policy 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."
Ever since it launched the Snapdragon S4 on the 28nm process with an integrated LTE modem, Qualcomm began rising rapidly in the mobile chip market, and many device makers preferred its chips over the competition. Many consumers also wanted to see Qualcomm's high-performance, battery-friendly chips in their devices, as they tended to do better in reviews and benchmarks.
However, the above feature set doesn't necessarily mean that Qualcomm's success was purely defined by demand, and that the company didn't also use exclusivity deals and bundling to lock in its customers. At least the EU Commission doesn't seem to think so, which is why it started the two antitrust investigations.
Qualcomm doesn't believe it has done anything wrong, but it will cooperate with the Commission.
“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," said the company in an email statement.
The Chinese government already fined Qualcomm $975 million in a settlement after it said the company was abusing its market position to overcharge for its wireless technologies. As part of the settlement, Qualcomm also agreed to offer licenses for its 3G and 4G basebands to other companies at a sharp discount.
The EU Commission previously investigated the company over FRAND patents abuses, but it wasn't found guilty. Qualcomm announced last November that the U.S. FTC has also started an antitrust investigation into its practices.
After losing the Snapdragon 810 contract with Samsung and therefore millions in potential sales, topped with all of these antitrust investigations, it looks like 2015 isn't Qualcomm's best year.