The European Commission has opened two formal antitrust investigations into possible abusive behavior by Qualcomm in the field of baseband chipsets used in consumer electronic devices. The first will examine whether Qualcomm has breached EU antitrust rules that prohibit the abuse of a dominant market position by offering financial incentives to customers on condition that they buy the baseband chipsets exclusively from Qualcomm.

The second investigation will look into whether Qualcomm engaged in predatory pricing by charging prices below costs with a view to forcing its competition out of the market.

“We are launching these investigations because we want to be sure that high-tech suppliers can compete on the merits of their products,” said Margrethe Vestager, EU Commissioner in charge of competition policy. “Many consumers use electronic devices and we want to ensure that they ultimately get value for money. Effective competition is the best way to stimulate innovation.”

Baseband chipsets process communication functions in smartphones, tablets and other mobile broadband devices. They are used both for voice and data transmission. Qualcomm is the world’s largest supplier of baseband chipsets. Article 102 of the EU Treaty prohibits the abuse of a dominant market position.

The first antitrust investigation focuses on Qualcomm’s conditions related to the supply of certain chipsets that comply with 3G (UMTS) and 4G (LTE) standards and are used to deliver cellular mobile connectivity in smartphones and tablets. The commission will investigate whether Qualcomm provided financial incentives to its customers in exchange for purchasing all or a significant part of their baseband chipsets from Qualcomm, and whether any such behavior hindered the ability of rivals to compete.

The second investigation concerns Qualcomm’s pricing practices with regard to certain chipsets that comply with 3G (UMTS) standards and are used to deliver cellular mobile connectivity. The commission will be assessing whether Qualcomm sold these chipsets at prices below costs, with the intention of driving its competition from the market.