EU: Qualcomm fined €242M for engaging in predatory pricing

Commissioner Margrethe Vestager, in charge of competition policy, said, “Baseband chipsets are key components so mobile devices can connect to the Internet. Qualcomm sold these products at a price below cost to key customers with the intention of eliminating a competitor. Qualcomm’s strategic behaviour prevented competition and innovation in this market, and limited the choice available to consumers in a sector with a huge demand and potential for innovative technologies. Since this is illegal under EU antitrust rules, we have today fined Qualcomm €242 million.”

The EU started a formal probe of the case in 2015 after a competitor to Qualcomm, British phone chip maker Icera, alleged that between 2009 and 2011 the US company engaged in “predatory pricing,” selling certain chips at a price below the market to drive Icera out of business. Icera has since been bought by Nvidia, which later withdrew from the baseband chips market.

The EC  investigation found that Qualcomm abused this dominance between mid-2009 and mid-2011 by engaging in predatory pricing. Qualcomm sold certain quantities of three of its UMTS chipsets below cost to Huawei and ZTE, two strategically important customers, with the intention of eliminating Icera, its main rival at the time in the market segment offering advanced data rate performance.