EU investigates Qualcomm for forcing chips on smartphone makers

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The umpteenth investigation into choices made by Qualcomm has been announced. Whereas in recent years it has already had to pay billions because of anti-competitive behaviour on the chip market, it is now the European Union that is investigating the issue of a new series of chips. The special radio-frequency chips would be imposed on smartphone manufacturers in combination with older modem chips.

In smartphones that are ready for 5G, the new radio frequency chips have become indispensable, and Qualcomm is eager to supply them. Instead of giving manufacturers the opportunity to get such chips at another vendor (including Broadcom, Skyworks and Qorvo), Qualcomm is trying to offer them in combination with the modem chips, so that other manufacturers are sidelined.

Expected fine

According to Qualcomm, it is still at the stage of providing information to the EU to avoid a possible fine, but it seems that the company is already taking a possible fine into account. Qualcomm is already able to report that if a fine were to be imposed, it would amount to a maximum of ten percent of last year’s profits. At the same time, Qualcomm also points out that the earnings from the radio frequency chips market are significantly higher than what analysts had predicted beforehand.

A calculated risk, given that big names such as Google, LG and Samsung are on Qualcomm’s client list when it comes to purchasing radio frequency chips. A possible fine for disturbing a competitive market would be nothing new: in 2019 Qualcomm already received a fine of almost 250 million euros, and a year earlier they had to cough up almost a billion euros. In both cases, the problem was blocking the competitiveness of the market.