Published: Fri, January 26, 2018
Life&Culture | By Rose Hansen

Qualcomm to Pay $1.23 Billion Fine in Europe for Stifling Competition

Qualcomm to Pay $1.23 Billion Fine in Europe for Stifling Competition

The European Union on Wednesday slapped a $1.23 billion fine on US chipmaker Qualcomm for abusing its market dominance in the lucrative sector of components in smartphones and tablets for half a decade.

Competition Commissioner Margrethe Vestager said that Qualcomm had paid billions of dollars to Apple to exclusively use its chips in iPhones and iPads. The company was slapped with a $1 billion lawsuit by Apple in January 2017 and the FTC has also sued the chipmaker for more antitrust law violations.

Apple said that Qualcomm had withheld almost $1 billion in payments from it as retaliation for "responding truthfully to law enforcement agencies investigating them", alluding to anti-trust investigations in China and South Korea that have cost Qualcomm billions of dollars. Over most of that period, Qualcomm accounted for more than 90% of the market.

In January 2017 U.S. regulators claimed that Qualcomm had forced Apple to exclusively use its products in return for lower fees.

White House unveils immigration plan laced with white nationalist policy ideas
To become law, the measures would also need to pass the House of Representatives, where Republicans have a bigger majority. The proposed bill, to be unveiled on Monday, requests $25bn (£17.6bn) in funds for a wall on the Mexican border.

The agreement, the European Union argued, prevented Qualcomm's rivals in the same industry - such as Intel - from being part of a fair competition especially since the customer involved was one of the biggest technology companies in the world.

Apple declined to immediately comment.

Dan Olds, principal analyst at Gabriel Consulting Group, told eWEEK the antitrust agency "really wanted to send a message with their huge fine on Qualcomm" by telling the company "don't use your position of power to bribe other companies to deny your competitors a piece of the pie". "This ruling, along with others, proves that the European Union isn't shying away from any battles these days".

This hasn't been the first time that the European Regulators have smacked a massive fine against these private companies, as a matter of fact; the previous regulation also involves anticompetitive practices. She said it amounted to nearly five percent of annual turnover. "For example, the Intel LTE modems that Apple now uses are reportedly running into various performance issues". As the Commission stated, both companies entered an agreement in 2011 stating that Qualcomm would be the sole supplier of LTE chips to the iPhone maker.

Like this: