Qualcomm has once again come under direct scrutiny of EU (European Union) investigators for anti-competitive behavior. This time the EU is concerned about the first significant sales gains announced by Qualcomm from a new category of RF chips, it has been selling to mobile phone makers.
Qualcomm has stated that the EU is investigating whether the company engaged in anti-competitive behavior in the European Union (EU)/European Economic Area (EEA) by leveraging its market position in 5G base-band processors in the RFFE (RF Front End) space. The claims where confirmed by an EU spokesperson in an interview to TechCrunch stating that the Commission has indeed sent out questionnaires, as part of a preliminary investigation into the market for radio frequency front end (RFFE).
The recent development comes after Qualcomm spent years battling regulators, paying billions of dollars in fines, over allegations that it engaged in anti-competitive patent licensing practices. Last year, the company was fined €242 million for selling 3G chips at predatory prices between 2009 and 2011 in an attempt to drive competing supplier Icera out of the market. Prior to that, in 2018, the EU slapped Qualcomm with a massive €997 million fine for paying Apple billions of dollars between 2011 and 2016 to exclusively use its 4G chips. Despite these fines, Qualcomm has remained a dominant supplier of cellular modems. Qualcomm, last year, also lost a case brought by the U.S. Federal Trade Commission and remains locked in an appeal.
Qualcomm, until now has remained a leader in RF modem chips, delivering products globally for leading phone makers. But now, with the on-coming 5G future, the company also extended its foray into developing new RF Front End (RFFE) chips which are a necessity in 5G smart phones. And according to reports, the company has been trying hard to convince phone makers to use its new RF chips together with its own RF modem chips, thus creating a single-integrated platform for connectivity in mobiles. Qualcomm claims that its revenue from the RF market contributed to a sales forecast that beats analyst expectations.
In the latest filing, Qualcomm is in the process of responding to the probe by the European Commission, the EU's executive branch, after it served a request for information with the company on Dec. 3. The commission could impose a fine of up to 10% of annual revenue if a violation were found.
Although, analysts claim that the EU investigation was unlikely to slow Qualcomm’s progress in the RF chip market. The company already boasts of major RF chip contracts with Samsung Electronics Co Ltd, Alphabet Inc's Google and LG Electronics Inc, and more.
