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Qualcomm Faces Antitrust Charges In Europe (nytimes.com) 33

An anonymous reader writes: Chipmaker Qualcomm is on the receiving end of an antitrust investigation in Europe, where officials say the company has abused its market dominance by offering financial incentives to device manufacturers to exclusively use Qualcomm chips. "Qualcomm was also accused of unfairly setting prices below manufacturing costs to force competitors from the market. ... If found to have breached Europe's antitrust rules, the chip maker could face fines amounting to about 10 percent of its annual global revenue, which was $26.49 billion in 2014, and could be required to change some of its business practices. In previous European antitrust cases, however, companies typically have not been asked to pay such high financial penalties."
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Qualcomm Faces Antitrust Charges In Europe

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  • by Anonymous Coward

    Google is worried enough about Qualcomm's lock on the market that they're looking to get in to the chip design biz.

    Qualcomm really blundered their entry in to the 64bit mobile chip market with a part that is pretty much under constant thermal throttle. Google's also interested in implementing features that Qualcomm has no interest in putting in to their SoCs

    Apple saw this coming years and years ago and went so far as to buy a chip design company so they could design their own SoCs in house. The result was b

    • by e r ( 2847683 )

      Apple's 2 core SoCs typically beat the quad and 4big/4small multi core parts in both performance and efficiency.

      You mean that objective-C running on Apple's dual-core chips typically beats Java running on big/LITTLE quad cores.

      • Android apps are free to make use of native code if/when it's appropriate, no?

    • Google could just buy one of the chip companies. Is Freescale still around? What about TI or Marvell? In fact, if they wanted, they could even do a deal w/ MIPS and build a better CPU than ARM that is an optimal performance and power consumption b/w Intel and ARM
    • Apple saw this coming years and years ago and went so far as to buy a chip design company so they could design their own SoCs in house.

      I don't know if Qualcomm's lock on the market was one of the reasons Apple went into chip design as much as their frustration with the lack of choices when it came to mobile CPUs. The problem with Samsung and Qualcomm (and other maker) was that they design chips for a wide variety of customers and purposes. As such they were very generic chips. Customization of chips costs time and money. While Apple might have been willing to do that short term; it wasn't a long term strategy. Having gone through a similar

  • by Anonymous Coward

    Qualcomm is being accused of predatory pricing. This is illegal in Europe but generally not in the US. This seems like an overly restrictive law that works against the best interests of consumers. There's a good reason why predatory pricing isn't generally against the law in the US. In order to be a profitable practice, there must be a sufficiently large price hike once the competition is forced out of the market in order to recoup their losses. This generally doesn't work. Once the prices are dramatically

  • the chip maker could face fines amounting to about 10 percent of its annual global revenue

    Oh no! Ten whole percent!? What ever are they going to do with such sore wrists?

    • by Shinobi ( 19308 )

      10% of their global annual revenue isn't just a slap on the wrist. For the fiscal year 2014 it'd be almost $2.7Bn, which would have the net effect of cutting almost a third of their profit, AND have the knock-on effect of their stock taking a dive too.

    • Note that's 10% of revenue, not profits. That is a pretty large amount.
  • Why does the EU think 10% of global revenue (not profits, mind you) is fair? Shouldn't that be based on revenue from the EU?
    • Because if the EU imposed that, Qualcomm should shift all of their "revenue" away from the EU. Suddenly it is counted as "Asian" revenue instead.
      • No, you can't shift revenue like you can shift profits - that's why I made the distinction. Shifting profits is relatively easy - you just make shell companies, license things around, etc. Revenue is just "money we got for something" - you can't really move that around in the same way.
    • by Xest ( 935314 )

      Because it's meant to be a punishment and deterrent, not a pointless slap on the wrist that doesn't achieve anything.

      The real question is why do you think it's unfair? If their practices have prevented a competitor in Europe from from getting in on the action to obtain profits in the global marketplace, then what's the problem with taking the infringers profits obtained in the global marketplace? They're only taking back what the infringing company potentially prevented Europe from obtaining from the global

      • I think it's unfair because, if the EU thinks it has broken antitrust laws in Europe, penalize them for the amount of money they made in the EU. It could easily be a higher percentage of that money, but fining them based on their revenues in other areas of the world isn't fair. Consider a company that is huge in Asia but does very little business in Europe; assuming it broke EU laws, should it have to give up a lot of money it earned in Asia in compliance with local laws?

        Also note, it's revenues, not prof
        • by Xest ( 935314 )

          But it's not about what they've earned, that's not the point of the law. The point is to stop companies doing something that harm competition.

          "With regards to your hypothetical company - how would their actions in the EU prevent a competitor from entering the global market? If the competitor can compete in the global market with the antitrust violations"

          You have this completely backwards, if a company can compete regardless of the anti-trust violations then, great, but what if it can't compete because of th

          • No, if a company can't compete in other countries because of Qualcomm's alleged violations in the EU, then they wouldn't have made money in those other countries anyways. The EU should not be policing antitrust violations outside of the EU; that's just trying to be the world's policeman, and that's a bad thing (just like when America does it).

            What you're basically arguing is that companies should be free to fuck companies over with anti-competitive practices outside of Europe as long as they behave whilst within Europe. Sorry but why should we accept them in Europe at all if they're going to fuck over our companies with illegal practices outside of Europe? The other option is we block them from Europe altogether, and as the largest market that'll hurt them far more than a fine of global revenues for a year will - again, they can even choose this option for themselves if they wish.

            Yeah, I'm arguing that the EU shouldn't fine companies for things they do outside of the EU. That oversteps the EU's authority, just like the US routinely oversteps it

            • by Xest ( 935314 )

              "No, if a company can't compete in other countries because of Qualcomm's alleged violations in the EU, then they wouldn't have made money in those other countries anyways."

              Why not? If Qualcomm has amassed a fortune by cheating in the EU then it's bound to have an advantage outside of the EU because of all that wealth it has obtained and can use to strengthen itself elsewhere. For example, if there's a hot new startup in China, and Qualcomm has a billion pounds to bid to acquire it, but it's EU competitor on

              • Ah, but using the profits obtained by cheating in the EU to subsidize losses elsewhere (to gain monopoly share) would already be in violation of anti-trust laws in other places. I'll concede that the upper management might be content to receive lower profits from outside the EU if they were getting a lot within the EU, but I think abusing market position in, say, Japan, could be prosecuted there. Oh, Switzerland is dirty as hell, I agree - but that sort of thing is better handled using trade agreements, don

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