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Infineon takes Q2 hit from chip unit Qimonda

The German electronic components maker Infineon reported on Wednesday a sharp net loss in the second quarter of its fiscal year, in large part owing to its loss-making chip unit Qimonda.

Infineon said its net loss had widened to €1.37 billion ($2.2 billion) in the period from January to end March, from a much more modest loss of €11 million in the same period a year earlier.

On Tuesday, the group announced that it was writing down by €1 billion the value in its books of Qimonda, in which Infineon holds a 77.5 percent stake that it seeks to sell in part before next year.

The Financial Times Deutschland quoted company and industry sources Wednesday as saying that talks were underway with the US group Micron, Elpida of Japan, the Korean group Hynix and financial investors.

Infineon might also contribute Qimonda to a cooperation venture rather than sell it outright, the report said.

Meanwhile, operations at Infineon itself posted mixed results, with second quarter sales gaining 7.0 percent to €1.049 billion, and core earnings (excluding Qimonda) reaching €36 million, compared with a loss a year ago.

But analysts noted that operating profit had fallen by almost half from the first quarter of the current fiscal year which began in October, and that sales had slipped as well.

The group’s outlook was only for “positive” core earnings before interest and taxes (EBIT), and for sales to increase by between five and 10 percent.

AMAZON

Germany opens ‘anti-competition’ probe into Amazon with tougher law

Germany's competition authority said Tuesday it had opened an inquiry into online retail giant Amazon over potential "anti-competitive practices", using a new law giving regulators more power to rein in big tech companies.

Germany opens 'anti-competition' probe into Amazon with tougher law
An Amazon warehouse in Brandenburg. Photo: picture alliance/dpa/dpa-Zentralbild | Patrick Pleul

Federal Cartel Office head Andreas Mundt said his office is examining whether Amazon has “an almost unchallengeable position of economic power” and whether it “operates across various markets”.

If so, it would be deemed of “paramount significance”, said Mundt, adding that the regulator could “take early action against and prohibit possible anti-competitive practices by Amazon”.

“This could apply to Amazon with its online marketplaces and many other, above all digital offers,” he added.

Under the amendment to Germany’s competition law passed in January, the watchdog said it now has more power to “intervene earlier and more effectively” against big tech companies, rather than simply punishing them for abuses of their dominant market position.

READ ALSO: ‘I want to know origin of my grapes’: Amazon loses fruit and veg ruling in German court

The German reform coincided with new EU draft legislation unveiled in December aimed at curbing the power of the internet behemoths that could shake up the way Silicon Valley can operate in the 27-nation bloc.

The push to tighten legislation comes as big tech companies are facing increasing scrutiny around the globe, including in the United States, where Google and Facebook are facing antitrust suits.

The Amazon probe is only the second time that Germany’s Federal Cartel Office has made use of its new powers, after first employing them to widen the scope of an investigation into Facebook over its integration of virtual reality headsets.

The watchdog already has two traditional abuse control proceedings open against Amazon.

One involves the company’s use of algorithms to influence the pricing of third-party sellers on Amazon Marketplace, while another is probing the extent to which Amazon and major producers such as Apple exclude third parties from
selling brand products.

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