Qualcomm was hit with a €242 million fine by the European Commission (EC), which deemed the company had abused its market dominance in 3G baseband chipsets by trying to force a rival out of the market
In a statement, the EC said Qualcomm sold the chipsets, which are key components for mobile devices to connect to the internet, below cost from mid-2009 to mid-2011, “with the intention of eliminating Icera”, its main rival at the time.
Following a probe, the EU said Qualcomm’s actions were illegal under antitrust rules.
“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,” competition commissioner Margrethe Vestager said.
The EC said it had determined Qualcomm held a dominant position in the global market for UMTS baseband chipsets between 2009 and 2011, based on its market share of approximately 60 per cent. While market dominance is not illegal under Europe’s antitrust law, the EC said companies occupying such a position had a special responsibility not to abuse their power by restricting competition.
It said Qualcomm engaged in predatory pricing, selling certain quantities of three chipsets at below cost to two strategically important customers: Huawei and ZTE.
The €242 million fine represented 1.27 per cent of Qualcomm’s turnover in 2018, and takes into account the duration and gravity of the infringement.
This is the second time Qualcomm has been in the EU’s crosshairs in the last two years. In January 2018, the Commission imposed a €997 million penalty on the company for paying Apple to exclusively use its LTE baseband chipsets.
Qualcomm released a statement shortly after the decision confirming it was going to appeal the EU fine.
Don Rosenberg, EVP and general counsel at the company said the two customers, Huawei and ZTE, said “they favoured Qualcomm chips not because of price but because rival chipsets were technologically inferior”.
“This decision is unsupported by the law, economic principles or market facts and we look forward to a reversal on appeal,” he said.Subscribe to our daily newsletter Back