Qualcomm (NASDAQ:QCOM) stock dropped on Friday after reports indicated China has launched an antitrust investigation into the company’s recent acquisition of Israeli firm Autotalks.
The move signalled increased regulatory scrutiny on U.S. tech firms ahead of a key summit between Presidents Donald Trump and Xi Jinping.
The State Administration for Market Regulation said it will examine potential violations of China’s anti-monopoly laws related to the June deal, Bloomberg reported on Friday.
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The move highlights Beijing’s strategy to exert leverage before the expiration of the U.S.-China trade truce, following a series of measures this week, including tightened controls on rare earth exports and continued avoidance of American soybean purchases.
Chinese authorities are also investigating Nvidia’s (NASDAQ:NVDA) 2020 purchase of networking gear maker Mellanox.
In August 2023, the European Commission urged Qualcomm to obtain European Union antitrust approval before completing its acquisition of Autotalks.
The Commission emphasized that original equipment manufacturers and infrastructure operators must continue to access vehicle-to-everything (V2X) technology on fair terms. EU countries sought closer scrutiny, citing concerns over V2X semiconductors.
In February 2024, the U.K.’s Competition and Markets Authority (CMA) initiated a formal investigation into Qualcomm’s acquisition of Autotalks, citing concerns related to antitrust.
Qualcomm stock has gained around 8% year-to-date, lagging behind the Nasdaq 100 index’s close to 20% returns, weighed down by lackluster smartphone demand, tariff uncertainties, and the looming loss of its business with Apple (NASDAQ:AAPL).
Price Action: Qualcomm stock was trading lower by 1.30% to $163.50 premarket at last check Friday.
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