European Commission: Qualcomm illegally paid for exclusive purchase of chipsets

Qualcomm has paid a large smartphone and tablet maker a lot of money since 2011 for exclusive purchase of its UMTS and LTE chipsets. This is the conclusion of the European Commission after an investigation. The practice has hindered competition and innovation.

The European Commission has come to the preliminary conclusion that Qualcomm is guilty of illegally paying for exclusive purchase of its UMTS and LTE chipsets. The committee also notes that Qualcomm provided the chipsets below cost in order to push its main competitor, Icera, off the market.

The European Commission has informed Qualcomm of the preliminary findings with two Statements of Objections, saying that the company may be violating European antitrust rules and abusing its dominant market position.

The European Commission does not name which major smartphone and tablet manufacturer has accepted the sums of money from Qualcomm in exchange for exclusivity. However, the agreement would have been in force since 2011 and the clause in question would still be in force. The former Nvidia subsidiary Icera complained to the European Commission in 2010 about the low prices Qualcomm would ask for its chipsets.

Qualcomm now has three months to respond to the allegation of illegal payment for exclusivity and four months to respond to the claim of aggressive pricing. For both cases, the US company can request an oral hearing.

The European Commission started the two competition investigations in July this year. The chip company could be fined millions if found guilty.