Qualcomm’s Autotalks Acquisition Faces UK Antitrust Scrutiny

The UK’s Competition and Markets Authority (CMA) announced on Friday that it is investigating whether Qualcomm’s proposed takeover of Israeli auto-chip maker Autotalks would reduce competition in the UK market. The CMA has invited comments from interested parties by October 15, before launching a formal probe into the deal.

Qualcomm to Expand its Automotive Business with Autotalks

Qualcomm, a leading US chipmaker, announced in May that it would acquire Autotalks, a maker of chips used in vehicle-to-everything (V2X) communications technology. V2X enables vehicles to communicate with each other, as well as with infrastructure and pedestrians, to enhance safety and efficiency on the roads. Autotalks’ chips are designed to support both cellular and dedicated short-range communications (DSRC) standards for V2X.

Qualcomm’s Autotalks Acquisition Faces UK Antitrust Scrutiny
Qualcomm’s Autotalks Acquisition Faces UK Antitrust Scrutiny

Qualcomm said that the acquisition would help it expand its automotive business and offer a comprehensive portfolio of solutions for connected and autonomous vehicles. Qualcomm did not disclose the terms of the deal, but according to Israeli media reports, the transaction was valued at around $200 million.

CMA to Assess the Impact of the Deal on UK Competition

The CMA said that it is considering whether the deal would result in a “substantial lessening of competition” within the UK market. The CMA has the power to block or impose conditions on mergers that could harm consumers or businesses in the UK.

The CMA has asked for comments from any person or business that may be affected by the deal, such as customers, suppliers, competitors or industry associations. The deadline for submissions is October 15, 2021. The CMA will then decide whether to launch a phase 1 investigation, which usually lasts up to 40 working days. If the CMA finds that there are potential competition concerns, it can refer the case to a more in-depth phase 2 investigation, which can take up to 24 weeks.

Qualcomm Faces Regulatory Hurdles in Other Jurisdictions

The UK is not the only jurisdiction where Qualcomm’s Autotalks deal faces regulatory scrutiny. Last month, the European Commission said that Qualcomm would have to seek antitrust approval for the planned takeover, as it could affect competition in the European Economic Area. The Commission has not yet opened a formal investigation into the deal.

According to Politico, the US Federal Trade Commission (FTC) is also expected to open an in-depth probe into the deal, as it could raise concerns about Qualcomm’s dominance in the wireless chip market. The FTC has previously sued Qualcomm for allegedly abusing its market power and charging excessive royalties for its patents.

Qualcomm and Autotalks did not immediately respond to requests for comment on the CMA’s announcement.

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