May 8, 2015 / 7:15 PM / in 4 years

EU antitrust regulators query Qualcomm rivals on its business practices

BRUSSELS (Reuters) - EU antitrust regulators are asking Qualcomm’s rivals how the U.S. chipmaker’s business practices and the way it licenses its products affect them, as part of an investigation begun seven months ago, a document seen by Reuters showed.

Qualcomm's logo is seen at its booth at the Global Mobile Internet Conference (GMIC) 2015 in Beijing, China, April 28, 2015. REUTERS/Kim Kyung-Hoon

Qualcomm has been feeling the regulatory heat in Europe, the United States, China, Japan and South Korea in recent years as watchdogs focus on its licensing model and its power over patents.

The bulk of its revenue comes from selling baseband chips, which enable phones to communicate with carrier networks, but a large portion of its profit comes from licensing patents for its CDMA cellphone technology.

The European Commission told Qualcomm in October last year that it was investigating the way it sells and markets its chips, as well as rebates and financial incentives offered to customers, the company said in a regulatory filing last month.

In a questionnaire sent to competitors last week, the EU competition authority asked about the impact of various Qualcomm practices such as pass-through rights where phone makers are allowed to use patents already licensed by Qualcomm.

It also wanted to know how they feel about cross-licences and mutual non-assertion provisions in which companies agree not to enforce patent rights against each other.

Recipients of the document of more than 40 questions have until mid-May to respond.

A Commission spokeswoman declined to comment and Qualcomm had no immediate comment.

This is one of two EU inquiries into the company. The other probe, begun in 2010, was triggered by a complaint from British cellphone chipmaker Icera, a subsidiary of Qualcomm rival Nvidia Corp, about rebates and financial incentives.

The EU executive scrapped a two-year probe into the company’s patent royalties in 2009 after complainants including Ericsson and Texas Instruments withdrew their grievances.

Reporting by Foo Yun Chee; Editing by Pravin Char

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