Antitrust regulators for the European Union will investigate the $38 billion deal between Qualcomm (QCOM) - Get Report and NXP Semiconductors (NXP) - Get Report , Reuters reported.

Should the deal go through, Qualcomm will become the leading supplier of chips to the automotive market. The company currently supplies chips to Android smartphone makers and Apple (AAPL) - Get Report .

The European Commission released its concerns over the deal Friday, citing the combined company's incentive to squeeze out rivals in baseband chipset sales and near field communications by bundling its products.

The EU expressed concern that Qualcomm might alter NXP's intellectual property licensing protocol by tying NXP's patents to its own portfolio.

The deal is set to be the largest ever in the semiconductor industry. U.S. antitrust regulators okayed the deal in April. The European Commission will decide on the deal by Oct. 17.

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