Semiconductors/Network platforms

Qualcomm wins fight against €1B EU fine

It's not been the best few months for competition regulators at the European Commission (EC) who have been trying to rein in what they see as abuses of dominant market positions by some of the world's biggest tech companies.

In January, the General Court of the European Union (EU) annulled in part the commission's decision to levy a €1.06 billion (US$1.1 billion) fine on Intel for its efforts to stifle rival Advanced Micro Devices (AMD).

Now, US chipmaker Qualcomm has just won its appeal against a €997 million ($1 billion) fine imposed by the EC in 2018. In a statement on Wednesday, the General Court said a "number of procedural irregularities" had affected Qualcomm's rights of defense and invalidated the "commission's analysis of the conduct alleged against Qualcomm."

The EU General Court cited 'procedural irregularities' by the European Commission in its case against the chipmaker. 
 (Source: Qualcomm)
The EU General Court cited 'procedural irregularities' by the European Commission in its case against the chipmaker.
(Source: Qualcomm)

The EC had accused the chipmaker of abusing its dominant position in the market by paying "billions of US dollars to a key customer, Apple" to exclusively use its chips in iPhones and iPads.

At the time, competition commissioner Margrethe Vestager said Qualcomm "illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance."

However, the court said in its ruling this week that the commission did not provide an analysis "which makes it possible to support the findings that the payments concerned had actually reduced Apple's incentives to switch to Qualcomm's competitors in order to obtain supplies of LTE chipsets for certain iPad models to be launched in 2014 and 2015."

The EC could appeal against the court ruling, although it's not yet clear whether or not it will do so.

Another appeal

In the meantime, Qualcomm is in the process of appealing against another EC fine of €242 million ($252 million) that was imposed in 2019 for breaches related to 3G technology dating back to 2010.

In 2020, Qualcomm also revealed in a regulatory filing that the Commission had launched an investigation into whether the company's efforts to persuade phone makers to buy its radio frequency chips together with its own modem chips represents an abuse of market position.

The Commission could impose a fine equivalent to 10% of annual revenue if it found Qualcomm guilty of the violation.

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For now, it seems that all eyes are on the next court challenge facing Vestager – who has been portrayed as Europe's "tech-slayer in chief" – and her team.

On September 14, the General Court is due to rule on Google's challenge against a €4.34 billion ($451 billion) fine issued by the commission in 2018 related to its Android operating system. The penalty was apparently the largest antitrust fine the EU has ever imposed.

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— Anne Morris, contributing editor, special to Light Reading

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