EU Sanctions Qualcomm With $1.2 Billion Fine For 'Abusing Market Dominance'
The European Union has issued a staggering 997 million euro (around $1.24 billion) fine against Qualcomm for "abusing its market dominance."
The EU Commission recently confirmed that it had imposed a sanction on the chip maker, specifically for its practice in selling its LTE chips. According to a press release, the EU reportedly found Qualcomm giving "significant payments to a key customer" under the condition that the company will be the only one to supply their LTE chip orders.
Qualcomm's alleged abuse of market dominance was manifested in a deal with Apple. As the Commission stated, both companies entered an agreement in 2011 stating that Qualcomm would be the sole supplier of LTE chips to the iPhone maker.
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"The agreement made clear that Qualcomm would cease these payments, if Apple commercially launched a device with a chipset supplied by a rival. Furthermore, for most of the time the agreement was in place, Apple would have had to return to Qualcomm a large part of the payments it had received in the past, if it decided to switch suppliers," the Commission reported.
The agreement, the EU argued, prevented Qualcomm's rivals in the same industry - such as Intel - from being part of a fair competition especially since the customer involved was one of the biggest technology companies in the world.
While EU explained that "market dominance" was not illegal in the Commission's rules, they expect companies like Qualcomm to act based on their "special responsibility" to avoid abusing their advantage.
Qualcomm's $1.23 billion fine was reportedly based on the company's 4.9 percent turnover in 2017.
Meanwhile, Qualcomm's executive vice president and general counsel, Don Rosenberg, also told Tech Crunch: "We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers."
Rosenberg added that they believe they have a strong case to have the Commission's ruling reviewed and will file their case "immediately" to the General Court of the European Union.
Meanwhile, it can also be recalled that Qualcomm and Apple have been going back and forth with lawsuits against each other for several reasons including patent infringement.
