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Europe updates its predatory pricing investigation against Qualcomm over UMTS baseband chips

On the heels of Google getting served a $5 billion fine by the EU over monopolistic practices associated to its Android working system, the European Commission at the moment resurfaced one other ongoing case on the earth of enormous U.S. tech corporations. The EC said that it has added to its investigation into Qualcomm and its predatory pricing of UMTS baseband chips. Specifically, at the moment the Commission has despatched extra particulars regarding parts of the “price cost” take a look at that it had utilized to measure simply how a lot beneath value Qualcomm was promoting UMTS baseband chips to edge out rivals.

If the case is determined in opposition to Qualcomm, the corporate may face an extra tremendous of as much as 10 p.c of its worldwide revenues. In 2009, these have been $10.4 billion, whereas in 2017, world turnover was over $22 billion.

The authentic, 2015 case was primarily based on a grievance filed by Icera — as soon as a giant participant in baseband chips — and dates again to practices between 2009 and 2011 and alleged that Qualcomm used its market place to barter artificially low costs for UMTS chips — utilized in 3G telephones — with a purpose to oust out Icera. Others that made related chips embrace Nvidia.

Qualcomm has wasted little time in responding to the notice posted by the EC.

“This investigation, now in its ninth year, alleges harm in 2009-2011, to a competitor who chose years later to exit the market for reasons unrelated to Qualcomm,” stated Don Rosenberg, normal counsel and govt vice chairman of Qualcomm in an announcement. “While the investigation has been narrowed, we are disappointed to see it continues and will immediately begin preparing our response to this supplementary statement of objections. We belief that once the Commission has reviewed our response it will find that Qualcomm’s practices are pro-competitive and fully consistent with European competition rules.”

Qualcomm is already in the middle of appealing a $1.23 billion tremendous within the EU over LTE chip dominance within the iPhone, associated to offers that have been made with Apple on the expense of one other large rival of Qualcomm’s, Intel. (Never thoughts that Apple and Qualcomm are additionally in the midst of a patent dispute.)

This older case, as Qualcomm factors out, has been narrowed because it was first introduced almost exactly three years ago. And whereas we don’t know what the precise particulars of the supplementary objections are and whether or not they have expanded them once more (we now have contacted the EC to attempt to discover out), the Commission additionally notes in its quick assertion — printed in full beneath — that sending an replace to its calculations doesn’t essentially indicate the end result of this case.

Statement beneath.

The European Commission has despatched a Supplementary Statement of Objections to Qualcomm Inc. This is a procedural step within the Commission’s ongoing investigation below EU antitrust guidelines trying into whether or not Qualcomm engaged in ‘predatory pricing’. The Commission despatched a Statement of Objections to Qualcomm in December 2015 detailing its issues. In specific, the Commission’s preliminary view is that between 2009 and 2011 Qualcomm offered sure UMTS baseband chipsets at costs beneath value, with the intention of eliminating Icera, its predominant competitor in the forefront section of the market at the moment. UMTS chipsets are key parts of cellular units. They allow each voice and information transmission in third era (3G) mobile communication. The Supplementary Statement of Objections despatched at the moment focuses on sure parts of the “price-cost” take a look at utilized by the Commission to evaluate the extent to which UMTS baseband chipsets have been offered by Qualcomm at costs beneath value. The sending of a Supplementary Statement of Objections doesn’t prejudge the end result of the investigation. More info is on the market on the Commission’s competitors web site, within the public case register below the case quantity AT.39711.

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