Thursday, October 18, 2007

EU Investigates Qualcomm

At the request of companies using the CDMA wireless technology invented by Qualcomm, the European Commission is investigating Qualcomm's business practices. Based on Europe's track record, it's doubtful the EC is even capable of being fair in this matter.

If the EC is concerned about ensuring a truly competitive market, why hasn't it investigated Europe's actions during the 1990s to prohibit Qualcomm's technology from being deployed in Europe? Note that one of the main charges against Qualcomm is that the firm offers a discount to companies that license its technology and buy its chips. What customer would not expect a discount in such cases? It's called economy of scale.

Is the EC investigating Airbus for using government subsidies to artificially lower its prices?

This case is about one thing and one thing only: European protectionism. The EC has ruled against Microsoft, Intel, and Rambus. This is a concerted effort to weaken U.S. chip and software makers in the European market.

There is only one thing that could cause the EC to dismiss the Qualcomm case or rule in Qualcomm's favor. It has nothing to do with principles or fairness. The EC could act favorably for Qualcomm in order to give its rulings against bigger firms such as Microsoft more credence.

But I seriously doubt the EC will do that. Europe has been quite brazen in pursuing its hypocritical, protectionist policies, and they are not about to miss this opportunity to help firms such as Nokia, Ericsson, and other GSM industry vendors.

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