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EU Files Antitrust Charge Against Qualcomm, Accuses Company Of Unfairly Forcing Out Competition

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The European Commission filed antitrust charges against Qualcomm on Tuesday, the latest in the increasing number of investigations surrounding the American technology company.

The EU's top antitrust authority has slapped Qualcomm with two sets of charges, one for allegedly offering financial incentives to smartphone and tablet manufactures that agreed to exclusively buy only from them, and the other for setting its prices below manufacturing costs to unfairly drive away competition.

"I am concerned that Qualcomm's actions may have pushed out competitors or prevented them from competing," European Competition Commissioner Margrethe Vestager said in a statement. "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."

The San Diego-based company — which is one of the world's largest makers of chips — now faces fines up to 10 percent of its global annual revenue for each charge, which was $25 billion in fiscal 2015. Qualcomm has until April to respond to the charges, but it can also ask for an oral hearing to have the regulator further explain the case.

Qualcomm did said that it was cooperating with the European authorities.

The European Commission previously launched its investigation of the chip maker back in July, but it is not Qualcomm's first. The company is also being investigated by Taiwan's antitrust authority regarding patent-licensing arrangements.

The company has also been investigated by the U.S. Federal Trade Commission for licensing after Qualcomm was hit was a $975 million fine for an antitrust accusation by China that alleged the company was violating the country's anti-monopoly laws.

Qualcomm's chips are used to process communications in smartphones, tablets and gaming devices, such as Apple's iPhone 6 (which uses the company's 4G modem). It is also known for its Snapdragon processor used in many new Samsung and HTC devices.

The company dominates the market, forcing competitors like Texas Instruments Inc. and Broadcom Corp. out of the market since they could no longer compete.

The EU previously opened an investigation on Qualcomm back in 2009 to find out whether the company charged high royalties but did not find any evidence to charge the company.

Source: NY Times

Photo: Kārlis Dambrāns | Flickr

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