- General
- July 18, 2019
- 5 minutes read
EU Hands Qualcomm $271 Million Fine
European Commissioner for Competition, Margrethe Vestager image: Radikale Venstre on Flickr The European Commission has imposed a fine of €242 million (around…
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| European Commissioner for Competition, Margrethe Vestager
image: Radikale Venstre on Flickr
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The European Commission has imposed a fine of €242 million (around $271 million) on U.S. chipmaker Qualcomm for behavior it termed “predatory pricing”. The EU is alleging Qualcomm at some time abused its market dominance in 3G baseband chipsets by selling them at below production cost with an aim to force competitor Icera out of the market. Such activity is illegal under EU antitrust law.
The EU alleges Qualcomm abused its market dominance between mid-2009 and mid-2011 by selling certain 3G baseband chipsets below production cost to Huawei and ZTE, claiming this was done with an aim of eliminating Icera, Qualcomm’s main rival in the 3G baseband market as at that time. An investigation into Qualcomm was first launched by the European Commission in 2015.
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| Qualcomm CEO Steve Mollenkopf
Photograph by Fortune Magazine
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The European Commission opened a formal investigation on the 16th of July 2015 and sent out a Statement of Objections [a document stating preliminary concerns of its investigation] on 8 December 2015. Another Statement of Objections was sent to Qualcomm in 2018 followed by a letter — that stated elements relevant to the EU’s final decision — February this year.
The EU says Qualcomm didn’t reply its request [made through a letter in January 2017] to obtain additional information for its investigation. In the absence of a reply, a formal decision was reached on the 31st of March 2017. Qualcomm on the other hand filed an application with the European General Court for the annulment of a formal decision but was met with a dismissal from the Court’s President.
The General Court earlier this year upheld the decision of the EU, a decision Qualcomm later appealed against. The EU appears to have implemented a final decision by fining Qualcomm an amount that represents 1.27% of its 2018 revenue. The EU says the decision from its investigation is based on a price-cost test for three Qualcomm chipsets of interest and “a broad range of qualitative evidence demonstrating the anti-competitive rationale behind Qualcomm’s conduct…”
