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Qualcomm may face EU antitrust investigation

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Qualcomm, already facing an investigation in China over alleged monopoly practices, may also soon face an antitrust investigation from the European Union.

The investigation on the world's top mobile chip maker will be in relation to a complaint made four years ago by an Nvidia subsidiary, Reuters reported.

The subsidiary of Nvidia that lodged the complaint is British mobile phone chip maker Icera, which the Qualcomm rival purchased in 2011.

Icera accused Qualcomm of anti-competitive strategies in June 2010, filing a complaint with the European Commission. While the details of the lodged complaint have not been released publicly, a source revealed that Icera was accusing Qualcomm of utilizing incentives related to patents and exclusionary pricing for chipsets to make it much less appealing for customers to work with Icera.

The issue looked like it was out of the Commission's minds until now, though it is usual for the competition authority of the European Union to require several years of building a case before starting a formal investigation.

Regulators chose to fast-track the issue after the second highest court in Europe last June upheld a €1.1 billion fine by the European Union against Intel, for abusing its dominant position in the chip market.

A source said that the Commission could open the case against Qualcomm after the summer, though Antoine Colombani, the competition policy spokesman of the Commission, declined to comment on the matter.

Companies that are found to have breached the antitrust rules of the European Union may receive fines of as high as 10 percent of their worldwide revenues.

Mobile phones in the market today usually have one or more Qualcomm chips inside them, with the past few generations of the iPhone using Qualcomm transceivers and modems. Many of the high-end Android mobile phones, along with an increasing number of budget phones, are using Qualcomm chips as well. In addition Windows Phone 8 and Blackberry 10 almost exclusively use Qualcomm chips.

The high usage of Qualcomm chips by mobile phone manufacturers is due to the fact that the company gives these manufacturers significant support. However, this also translates to power over the market that the chipmaker may abuse.

The European Union competition authority already had a four-year investigation underway against Qualcomm, but the operation was canceled in 2010 after the complainants, Swedish mobile telecommunications hardware manufacturer Ericsson and U.S. rival company Texas Instruments, dropped their accusations.

In 2009, the Fair Trade Commission of South Korea imposed a $286.6 million penalty on Qualcomm for abuse of its dominance in the CDMA modem chip market used by mobile phones manufactured by LG and Samsung.

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