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Smart-Card Chipmakers Said to Face European Antitrust Complaints

Chip manufacturers face antitrust complaints from European Union regulators over possible price- fixing of microchips for smart cards, according to three people familiar with the probe.

The European Commission may soon send a so-called statement of objections cataloging antitrust concerns in the case that dates back more than four years, said the people who didn’t identify the companies concerned and who asked not to be named because the EU process isn’t public. Such complaints are usually a precursor to fines.

The Brussels-based EU agency said in 2009 that it raided companies that make chips for telephone SIM cards, bank cards and identity cards because they may have fixed prices, allocated customers and exchanged commercially sensitive information.

Infineon Technologies AG (IFX), STMicroelectronics NV (STM), Renesas Technology Corp. and Atmel Corp. (ATML) said regulators searched their offices in 2008 as part of the EU investigation. NXP Semiconductors NV (NXPI), Europe’s third-largest chipmaker, said earlier this month that it was also involved in the probe and may be fined if the EU were to find it violated competition rules. It said it was assisting regulators.

Chipmakers have incurred hefty punishments for past antitrust violations. Intel Corp. was handed a record 1.06 billion-euro ($1.37 billion) fine by the EU in 2009 for monopoly abuse. The following year, the commission levied penalties totaling 331.2 million euros on Infineon and eight other manufacturers of dynamic random access memory, or DRAM, chips for personal computers and servers.

U.S. Probe

A 2002 U.S. Justice Department antitrust probe into computer memory chips used in mobile phones and computers led to claims against four companies and 16 people who were fined as much as $731 million.

Antoine Colombani, a spokesman for the commission, declined to comment on the EU regulator’s next steps in the smart-card chips probe.

After receiving the commission’s objections, companies concerned in antitrust cases can defend themselves in writing or at an oral hearing before the EU’s antitrust authority decides to impose fines.

The chip complaint follows the collapse of talks on a settlement between chipmakers and regulators that could have reduced fines by 10 percent, the people said.

Adversarial Approach

Eric Van Ginderachter, the EU antitrust agency’s director of cartels, said this month that officials are prepared to ditch settlement negotiations and adopt a more adversarial approach if progress isn’t being made.

Kay Laudien, a spokesman for Infineon, based in Neubiberg, Germany, near Munich, declined to comment. He referred to the EU for any statement on the matter.

NXP Semiconductors, which was spun off from Royal Philips Electronics NV in 2006, isn’t aware of any forthcoming EU antitrust complaint, said Pieter van Nuenen, a spokesman for the Eindhoven, Netherlands-based company.

STMicroelectronics “has not been involved in any discussions with the regulators concerning the investigation they have conducted on smart-cards,” said Alexis Breton, a Paris-based spokesman for the company.

Sander Arts, a spokesman for San Jose, California-based Atmel, didn’t immediately respond to an e-mail and a call seeking comment.

Oliver Luettgen, a spokesman for Tokyo-based Renesas’s European unit in Dusseldorf, Germany, didn’t respond to an e- mail and three calls seeking comment. Renesas, which was established in 2003 by Hitachi Ltd. (6501) and Mitsubishi Electric Corp. (6503), makes analog chips, microcontrollers, and semiconductors for products including mobile phones and car-navigation systems.

To contact the reporters on this story: Aoife White in Brussels at awhite62@bloomberg.net; Stephanie Bodoni in Brussels at sbodoni@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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