EU Formally Accuses Qualcomm Of Bribing Smartphone OEMs With Cold Hard Cash
Qualcomm is a dominant player in the mobile market when it comes to SoCs and 3G/4G basebands. In the baseband sector alone, Qualcomm held a commanding 61 percent of the global market in Q1 2015. However, the European Commission is a bit suspicious of Qualcomm’s dominance and is accusing the American company of impropriety with regards to its operations.
The European Commission’s preliminary findings show that Qualcomm illegally gave money to a [currently] unnamed smartphone OEM in an effort to ensure that only its 3G and LTE baseband chips were used, effectively blocking any other competitors. In addition, the exclusivity clause is still in place according to the European Commission. And if that wasn’t enough, the European Commission also says that Qualcomm sold its chips significantly below cost in order to keep its competitors at bay.
One such competitor was Icera, previously an UK-based firm that NVIDIA acquired in 2011 for $367 million. NVIDIA abandoned development its LTE basebands following immense market pressure from Qualcomm. NVIDIA planned to integrate its LTE baseband into future Tegra SoC designs, but those hopes were quickly snuffed out.
With its own Icera-branded basebands out of the picture, NVIDIA will be forced to partner up with another provider. And as we’ve already pointed out, Qualcomm is by far the biggest name in town, with MediaTek trailing far behind with just 18 percent of the global market. Qualcomm is likely hoping that
“Many consumers enjoy high-speed internet on smartphones and other devices – baseband chipsets are key components that make this happen,” said Margrethe Vestager, the EU’s commissioner for competition policy. “I am concerned that Qualcomm's actions may have pushed out competitors or prevented them from competing. We need to make sure that European consumers continue to benefit from competition and innovation in an area which is at the heart of today's economy."
Qualcomm has three months to respond to the first Statement of Objection regarding exclusivity payments and four months to respond to the issue of predatory pricing. Qualcomm can ask for an oral hearing if it chooses with respect to both Statements of Objection.
The European Commission launched its initial investigation back in July.