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Qualcomm Faces Antitrust Charges

Trade regulators in Europe accused San Diego-based mobile device chip-maker Qualcomm Tuesday of illegally paying a major customer for exclusive use of its chipsets, and selling chipsets below cost with the aim of forcing a competitor out of the market.

The Brussels, Belgium-based European Commission issued two Statements of Objection, which outline the allegations and give Qualcomm an opportunity to respond.

Qualcomm acknowledged that it's under investigation by authorities in Europe and also Taiwan, and said it is cooperating.

According to a statement from Qualcomm, the European Commission is looking into the supply of Qualcomm's chipsets to a single customer under an existing agreement, and the company's sales to two customers from 2009 through 2011 of three chipsets incorporated into dongles — small USB devices that at the time were used to provide cellular connectivity for laptops.

"Qualcomm has been cooperating with the commission since the outset of these matters, and now that we've received the Statements of Objections, we welcome the chance to formally respond," said Qualcomm general counsel and executive vice president Don Rosenberg.

"We look forward to demonstrating that competition in the sale of wireless chips has been and remains strong and dynamic, and that Qualcomm's sales practices have always complied with European competition law," he said.

Company officials have three months to respond to one of the accusations and four for the other.

"I am concerned that Qualcomm's actions may have pushed out competitors or prevented them from competing," said Margrethe Vestager, the EU Commissioner in charge of competition policy. "We need to make sure that European consumers continue to benefit from competition and innovation in an area which is at the heart of today's economy."

The commission's statement said it opened two formal investigations in July "to assess concerns that Qualcomm may have abused a dominant position in the area of baseband chipsets through two separate conducts."

Separately, the Taiwan Fair Trade Commission has requested information from Qualcomm and launched an investigation into whether the company's patent licensing arrangements violate the Taiwan Fair Trade Act, the company reported. Qualcomm said it believes it complies with the law.