The European Commission has opened an in-depth investigation into Qualcomm’s proposed acquisition of Netherlands-based NXP Semiconductors on concerns the deal could lead to higher prices, less choice and reduced innovation in the semiconductor industry. The acquisition would be the largest-ever in the semiconductor industry, converting Qualcomm into the world’s biggest supplier to the automotive chip market. In its statement, the EU antitrust regulator said the newly merged entity would hold strong market positions with both baseband chipsets and chips for near-field communications (NFC), giving the company the incentive to exclude rival suppliers from the market through bundling. There was also the possibility that it could modify NXP’s current intellectual property licensing practices by tying it to Qualcomm's patent portfolio, said the regulator.
In the automotive sector, the watchdog said it was particularly concerned that the merger would remove competition above all with regard to emerging Vehicle-to-Everything ("V2X") technology, which it said will play an important role in the future development of connected cars. “With this investigation, we want to ensure that consumers will continue to benefit from secure and innovative products at competitive prices,” said EU antitrust commissioner Margrethe Vestager. The EC now has 90 working days, until 17 October 2017, to take a decision.
The transaction has already been approved by US antitrust authorities, with Qualcomm issuing a statement saying the company was “confident” it could address the EU’s concerns and that it still expected the deal to close by the end of the year. The company has also been the subject of a separate EU investigation into alleged breaches of antitrust rules since 2015.
