Qualcomm to appeal $1.2bn fine over Apple deal

Qualcomm said it will appeal the decision of the European Commission (EC) to fine Qualcomm $1.23 billion “for abusing its market dominance in LTE (Long-Term Evolution) baseband chipsets.”

European Commissioner Margrethe Vestager, in charge of competition policy, 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.

“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 in 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.”

Apple and Qualcomm are locked in a long-running legal battle over Qualcomm’s business practices, which started with Apple suing Qualcomm for nearly $1 billion in patent royalty rebates.

Qualcomm confirmed it received the decision from the European Commission “relating to an expired agreement between Qualcomm and Apple Inc., which was in effect from 2011 through 2016” for the pricing of modem chips.

“The EC alleges that certain provisions of this agreement were in violation of European Union competition law and has imposed a fine of approximately 997,439,000 million Euros (approximately $1.23 billion USD at current exchange rates),” said Qualcomm.

“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.”

Qualcomm general counsel Don Rosenberg said: “We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers.

“We have a strong case for judicial review and we will immediately commence that process.”