Qualcomm to appeal €1bn EU fine levied over Apple payments

By:
James Pearce
Published on:

The European Commission found the chipset-maker had abused its dominant market position by paying Apple to use its 4G modems

Qualcomm has been hit with a €1 billion fine by the European Commission after it found the chipset-maker had abused its dominant position in the LTE baseband market.

Following an investigation, the EC found that Qualcomm’s relationship with Apple violated a number of antitrust laws. Qualcomm is accused of paying the technology giant billions of dollars to exclusively use its 4G chips in the iPhone and iPad.

“This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were,” said EU competition commissioner Margrethe Vestager in a press statement. “This is illegal under EU antitrust rules and why we have taken today’s decision.”

Though Apple were named in the case and the deals involved the iPhone-maker, Vestager made it clear that the smartphone manufacturer was not accused of any wrongdoing. The nature of the deal with Qualcomm meant switching supplier would “have cost Apple a lot of money”, effectively shutting out rival Intel, she added.

The EU’s antitrust commission began investigating the case in 2015 and the fine related to payments made by the chipmaker to Apple in exchange for it buying all of its baseband chipsets from the supplier between 2011 and 2016.

The decision, and the resultant fine which amounts to 4.9% of Qualcomm’s turnover in 2017, is especially notable given that Qualcomm and Apple are currently locked in several other legal disputes.

Qualcomm said it “strongly disagrees” with the decision and will “immediately appeal” it at the General Court of the European Union. Apple began using Intel chips after it’s deal with Qualcomm expired.

"Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance,” said Vestager. “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.”