Published in PC Hardware

Qualcomm to appeal $1.23 billion fine

by on24 January 2018


Anti-trust

The European Commission announced that it would be fining Qualcomm $1.23 billion, for abusing its market position between 2011 and 2016, related to its relationship with Apple.

The figure works out to 4.9 percent of Qualcomm’s revenues in 2017. And the 4.9 percent take was worked out based on the five+ year period of violation.

Competition Commissioner Margrethe Vestage said that 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 dollars so that Apple 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.

“This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were. Qualcomm’s behaviour denied consumers and other companies more choice and innovation – and this is a sector with a huge demand and potential for innovative technologies. This is illegal under EU antitrust rules and why we have taken today’s decision.”

Qualcomm has confirmed it has received a decision from the European Commission (EC) relating to an expired agreement between Qualcomm and Apple which was in effect from 2011 through 2016, for the pricing of modem chips.

"Qualcomm strongly disagrees with the decision and will immediately appeal it to the General Court of the European Union. The EC decision does not relate to Qualcomm’s licensing business and has no impact on ongoing operations", it said.

The Tame Apple Press is all excited about the ruling which it is spinning as proof that Qualcomm was evil and bullying. The only problem with this is that the issue is that Apple was not the victim in the case.  In fact it weakens Apple's argument that it was losing out to Qualcomm's licensing as this seems to indicate that the chip maker was paying Apple rather a lot to stay a customer. 

Don Rosenberg, executive vice president and general counsel of Qualcomm said the company was confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers and it has a strong case for judicial review and we will immediately commence that process.

We are just not quite sure why EU didn't fine Apple too. if you read carefully you'll probably agree that as the two parties made an exclusive agreement, it is hard to shake off the feeling that Apple is completely innocent. at the end of the day, Apple did agree to take  the money and not to use anyone else. Most EU commissioners, just like many rich politicians in the world, are iPhone users and Apple lovers, and love Steve Jobs/Tim Cook more than Angela Merkel or Theresa May. We're just saying.

 

Last modified on 24 January 2018
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