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More chips

John Cassels
07/11/2014

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United Kingdom

In 2009, the EU Commission decided to close its investigation into Qualcomm, the US chip manufacturer.

In 2009, the EU Commission decided to close its investigation into Qualcomm, the US chip manufacturer.  Qualcomm was being investigated following complaints by Ericsson, Nokia, Texas Instruments, Broadcom, NEC and Panasonic that Qualcomm was a holder of standard essential patents which it was refusing to license on FRAND terms.   When those complaints were withdrawn, the Commission decided not to pursue the matter.

At that time, the EU Commission tended to be cautious in taking forward investigations concerning allegations of 'exploitative' abuse.  Now, Qualcomm is under scrutiny again, the Commission having launched an investigation on 15 October.   The focus seems to be the provision of rebates and/or other financial incentives.

The line between permitted and pro-competitive rebates and unlawful exclusionary rebates is often unclear.  For companies that are or may be dominant anywhere in the EU, rebates that are designed to, or have the effect of, making market access more difficult for competitors, are likely to be risky.  This means that conditional rebates linked to volume purchasing targets and in particular, retroactive rebates which apply to every purchase made by a customer during a certain period, rather than only to purchases made after the volume target has been reached, will be risky.  Rebates that are specifically formulated by reference to a customer's demand also tend to be considered high risk.

For Qualcomm, the EU investigation adds to the antitrust probes that are already underway in the US and in China. 

If you are interested in these issues, please do not hesitate to contact John Cassels at john.cassels@fieldfisher.com

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