Qualcomm has had a rough year when it comes to antitrust claims and government investigations. Not only is the chip maker being sued by Apple and investigated by the FTC over in the US, but the European Commission had also launched its own anti-competition probe into Qualcomm. Now today, the EU has issued a €997 million fine to the company over various antitrust violations in its deals with Apple.
Qualcomm is accused of paying Apple large amounts of money between 2011 and 2016 to exclusively use Qualcomm’s LTE chips in iOS devices. Since Apple dominates such a huge portion of the mobile market, this in turn meant that competition couldn’t truly flourish.
As part of a press statement, the EU 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. Qualcomm paid billions of US Dollars to a key customer, Apple, so that it would not buy from rivals. These payments were not just reductions in price – they were made on the condition that Apple would exclusively use Qualcomm’s baseband chipsets in all its iPhones and iPads.”
As the commission puts it, this meant that “no rival could effectively challenge Qualcomm in this market”. As a result of these violations, Qualcomm is being fined exactly €997,439,000 which represents 4.9 percent of the company’s annual turnover. Aside from that, Qualcomm has also been ordered to not engage in these business practices again.
KitGuru Says: Qualcomm has previously been fined for anti-competitive practices in South Korea too, so this news isn’t a total shock. It does put Qualcomm in a tougher position going forward though, especially as it prepares to defend itself against Apple’s lawsuit and the FTC.