EU: Qualcomm fined €997m over Apple deal

The European Commission (EC) has announced it is fining Qualcomm €997 million (US$1.2 billion), equivalent to 4.9% of the company’s 2017 turnover, for “illegally shut[ting] out rivals from the market for LTE baseband chipsets for over five years,” in the words of EU Commissioner Margrethe Vestager.

The investigation which led to the fine, the third largest ever imposed by the EC, focused on agreements negotiated between Apple and Qualcomm, whereby the latter paid billions of dollars directly, rather than through discounts, in order that Apple sourced its baseband chips exclusively from them, according to the EC. Vestager said, “[t]his meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were. Qualcomm’s behaviour denied consumers and other companies more choice and innovation… This is illegal under EU antitrust rules and why we have taken today’s decision.” The agreement allegedly harmed rival chipmakers, among them Intel, which made significant but unsuccessful attempts to source LTE baseband chips to Apple prior to 2016.

LTE Baseband chips, which comply with the 4G Long-Term Evolution standard, connect smartphones and tablets to cellular networks.

According to Bloombert analyst, Ian King, Qualcomm was quick to point out that the fine was “retrospective [and] doesn’t affect the way we go forward.” Qualcomm has also declared it will appeal the fine to the General Court of the European Union, the second-highest court for the EU.

Qualcomm shares fell 1.2% in pre-market trading in New York, increasing pressure on the company, which is in the midst of a hostile takeover attempt by rival, Broadcom.

Full Content: Bloomberg

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