The European Union on Wednesday fined Qualcomm $1.2 billion for allegedly paying Apple to exclusively use its products, a violation under EU antitrust rules.
The EU Commission said Qualcomm was fined for “abusing its market dominance in LTE baseband chipsets” between 2011 and 2016.
“Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance,” Commissioner Margrethe Vestager, the leader of competition policy, said in a statement. “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.”
Vestager said Qualcomm’s actions prevented rival companies from being able to compete with the San Diego, Calif-based company, “no matter how good their products were.”
“Qualcomm’s behavior denied consumers and other companies more choice and innovation – and this in a sector with a huge demand and potential for innovative technologies,” Vestager said.
Qualcomm denied the EU’s allegations and said the company plans to appeal.
“We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers,” Don Rosenberg, executive vice president and general counsel of Qualcomm, said in a statement. “We have a strong case for judicial review and we will immediately commence that process.”
According to TechCrunch, the $1.2 billion fine comes out to about 5 percent of Qualcomm’s revenue in 2017 alone.
Qualcomm is currently in the process of being sold to Broadcom for $130 billion.
By Ray Downs