CRA advised Gemalto and Infineon, suppliers of software and chips for embedded secure elements for contactless payments in smartphones, who intervened before the European Commission in the $47bn acquisition of NXP by Qualcomm. The transaction was cleared by the FTC unconditionally, and by the European Commission subject to remedies in Phase II. The CRA team was led by Cristina Caffarra and included Bob Stillman; Pierre Régibeau; Uğur Akgün; Federico Etro and Alessandro Kadner-Graziano.
A key concern centred around NXP’s MIFARE, a key technology for contactless payments in transport and other domains, which is currently licensed by NXP to certain third parties. The CRA team developed multiple models of bundling to assess the impact of the merger on the incentives of the merged entity to license MIFARE, once it could offer its own bundles of baseband chipsets and secure elements; as well effects on innovation; and effects on consumer welfare.
The European Commission approved the merger subject to a number of conditions which extended to interoperability and patents. With specific reference to MIFARE, the commitments require Qualcomm to “offer licenses to NXP’s MIFARE technology and trademarks, for an eight-year period, on terms that are at least as advantageous as those available today.” Further information on the case can be found here.