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Qualcomm faces EU investigation over 'predatory pricing' for smartphone chips

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Qualcomm Snapdragon

Qualcomm is now facing two separate investigations from the European Commission over its chip-making business.

The Commission is trying to find out whether Qualcomm has been trying to force customers to use its mobile chips by taking advantage of its position as market leader.

Qualcomm is currently the world’s largest producer of mobile radio chips – the kind that manage Wi-Fi and 4G inside your smartphone.

The Commission’s first investigation will examine whether Qualcomm offered financial incentives for smartphone manufacturers to buy its 3G and 4G chips on an exclusive basis.

The second investigation hopes to determine whether Qualcomm used ‘predatory pricing’ by selling 3G chips under manufacturing cost to forestall rival efforts.

Qualcomm provided TrustedReviews with the following statement: “We were informed that the European Commission has taken the procedural step of ‘initiating proceedings’ against Qualcomm with regard to two ongoing investigations into Qualcomm’s sale of chipsets for mobile devices.”

It continues: “This step allows investigators to gather additional facts, but it represents neither an expression by the Commission on the merits of the case nor an accusation against the Company.”

The statement concludes: “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.”

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Qualcomm has dominated the mobile chip market for years, although Samsung recently strayed from the company’s Snapdragon series for its own custom-built Exynos chips with the Galaxy S6 and S6 Edge.

Similarly, other companies, for instance LG and Huawei, also produce their own chips, which appear in a number of branded handsets.

Margrethe Vestager, the EU Commissioner in charge of competition policy, said: “We are launching these investigations because we want to be sure that high tech suppliers can compete on the merits of their products.”

She adds: “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.”

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