The American chip manufacturer , Qualcomm, has recently found itself in the crosshairs of the European Commission. Specifically, the European Commission has launched an investigation into Qualcomm to determine whether the company engaged in anti-competitive practices in its 5G chipset business. The technology giant Qualcomm confirmed the investigation, noting that the European Community requested information in early December 2019 regarding the company's Radio Frequency Front End (RFFE) designs, which are used in 5G devices.
In more detail, the European regulators informed Qualcomm that the purpose of the investigation is to determine whether the company has adopted anti-competitive behavior in the European economic area. Qualcomm was quick to respond by informing investors that if the European regulators find that there has been a violation of competition rules, a fine of up to 10% of its annual revenue may be imposed, while restrictions will be imposed on its business practices that are deemed inappropriate. It also stated that precise predictions cannot be made regarding the outcome of the investigation as well as the legal remedies that will be imposed by the European Community. It also emphasized that the practices it followed were fully consistent with the EU. It is worth noting that in July 2019, the European Commission fined Qualcomm 242 million euros for anti-competitive “aggressive pricing” practices in the 3G baseband chipset market.
The company's watchdog said Qualcomm was selling Huawei and ZTE products at lower prices in order to force Icera, a rival British chipmaker, out of the market.
Qualcomm is also in a legal battle with the U.S. Federal Trade Commission (FTC), which alleges that Qualcomm is violating FRAND licensing commitments, charging excessive royalties, and negotiating with certain suppliers that violate antitrust rules. The court ordered Qualcomm to license patents on “fair, reasonable, and nondiscriminatory terms” to other companies and to file reports with the FTC for the next seven years to demonstrate compliance. These orders, among others, would have to be complied with if Qualcomm loses the lawsuit.
A few days ago, the company published favorable financial results for the first quarter of the year. According to them, in the first quarter of 2019, the company had revenue of $5.05 billion with $0.99 earnings per share. Accordingly, analysts predicted revenue of $4.83 billion with $0.65 earnings per share.
Qualcomm owes its successful quarter to the early adoption and deployment of 5G technologies. Qualcomm CEO Steven Mollenkopf said the company is looking to attract new RF front-end content and chipsets with higher levels of performance.
