Qualcomm to be the next target of EU antitrust regulators? China might be the answer

QUALCOMM logoThis hot, rich summer 2014 is approaching its end, but it seems like a hot fall is awaiting already. Google’s antitrust case is still a big question for European regulation on competition, but another case might be giving a big shake to the whole scene.

Reuters recently reported that Qualcomm, the world’s No. 1 mobile micro components and chipmaker, may face an investigation by the European Commission, related to a four-year-old complaint by UK chipmaker Icera, a subsidiary of Nvidia Corp. Icera, which was acquired by Nvidia in 2011 for almost € 470 million, took a complaint to the Commission in 2010, accusing Qualcomm of anticompetitive practices.

Reuters cited anonymous sources familiar with the matter, one of which declared that “The Commission may open a case after the summer”. If found guilty of breaching European Union rules, Qualcomm could face a fine of up to USD 2.5 billion. Hot enough for a fall-winter season, I would say. The Commission’s spokesman for competition policy, Antoine Colombani, declined to comment, and so did Qualcomm.

The matter is simple but complex at the same time. The main accusation made by Icera in 2010 is that Qualcomm used both patent-related incentives and exclusionary pricing of its components to block its customers from doing business with Icera. A “common” antitrust case, I would dare to call it, which was handled by the European Commission in its usual way: quite a long silence at first and a sudden breakthrough. Actually it’s not unusual for the EU competition authority to take several years to build a case before opening an investigation.

But there might be something more behind this wait, something unusual. The San Diego, California based firm is also under investigation in China, after the government decided to open a probe based on anti-trust and monopoly practices concerns. Investigations involve allegations that Qualcomm’s China subsidiary is overcharging and exploiting its position in the wireless communications standards sector. Now Qualcomm, which could face vast fines under China’s 2008 anti-monopoly laws, is seeking a quick – and pain-free! – conclusion to the “Chinese matter”, while Europe might have turned its eyes eastwards.

It is effectively possible that the investigation over Qualcomm activities in the Chinese telecom market and the suspicious anti-trust issues also prompted the EU Commission to examine whether there’s any truth to these accusations. This is what some think at least, considering a four-year silence way too long.

Let me say that this is a very interesting case. We are not here to determine if it’s true that the European Commission is waiting for Chinese authorities to speak about this antitrust matter before making any move – also because this would be impossible to say – but it’s the idea itself that is incredible. Imagine an authority like the antitrust watchdog of the European Commission to be interested, or better, to be keen to see the outcome of an investigation led on the other side of the world to get more info about the accused subject. Which is the same subject in both continents. Could this be real? We can only shape our opinion for now.

What is sure this summer though is that antitrust regulation related issues are a major topic in the EU. Such cases hold a special resonance for the European Union as technology firms in the 28-country bloc seek to boost their competitiveness by developing new innovative products, antitrust lawyer Rachel Bickler at Nabarro told Reuters. “Patent-related issues are very topical at the moment. I suspect technology and access to technology will remain very important to the Commission,” she added. And this is exactly what we feel and we have tried to communicate while reporting Google and Intel cases recently.

As yet, no official investigation has been opened by the European Comission anyway. Now it’s quite hard to say whether the accusations are too big or if Qualcomm did indeed try to deface the competition in some ‘almost legal’ ways.

Eventually it might take long to reach the truth of the matter, which is always a matter of research and patience.














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