Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Qualcomm’s licensing, incentive practices under investigation by FTC and EC, (Nov 6, 2014)

By Edward L. Puzzo, J.D.

Qualcomm, Inc. is currently under investigation by the FTC for its licensing of wireless broadband technology, according to the company’s Form 10-K, recently filed with the Securities Exchange Commission. The company reports that it was notified on September 17, 2014 that the FTC is conducting an investigation into its licensing business, including potential breaches of FRAND (fair, reasonable, and non-discriminatory) commitments. If violations of Section 5 of the FTC Act are found, potential remedies could include fines or modifications of the company’s licensing practices.

Qualcomm’s Form 10-K also disclosed that the European Commission (EC) provided notice on October 15, 2014 of an investigation concerning the sale and marketing of Qualcomm’s baseband chipsets, including alleged conditions relating to the provision of rebates or other financial incentives. If violations of Article 101 and/or 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 and/or 54 of the Agreement for the European Economic Area (EEA) Agreement are found, potential remedies include the imposition of a fine and/or injunctive relief prohibiting or restricting certain business practices.

Qualcomm stated that these investigations were in their early stages, and that it would continue to cooperate with the FTC and the European Commission during their investigations.

California-based Qualcomm is a leading provider of chipsets for mobile devices such as smartphones and is a developer and owner of intellectual property for wireless broadband technology, including Code Division Multiple Access (CDMA) digital communication technology, widely used in the transmission of voice and data over radio waves using cellular wireless networks.

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