EU fines Qualcomm $1.2bn over Apple chip deal

The European Union (EU), on Wednesday, fined a United States (U.S.) Smartphone chip supplier, Qualcomm, 997 million Euros ($1.23 billion) for breaching the bloc’s competition rules through a deal with Apple.
“Qualcomm abused its dominant market position by paying billions of dollars to Apple since 2011 in exchange for the tech giant exclusively using Qualcomm chipsets in its Smartphones and tablets,’’ the commission said.
Margrethe Vestager, European commissioner for competition, said the deal prevented Apple from possibly switching to other suppliers of baseband chipsets.
“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,’’ Vestager said
Qualcomm is the world’s largest supplier of baseband chipsets, which are used for voice and data transmission in Smartphones, tablet computers and other mobile devices.
Report says the fine represents 4.9 per cent of Qualcomm’s 2017 turnover.
Vestager noted that Apple was not implicated in the case because the issues were “clearly” Qualcomm using its dominant position in the market to undercut competitors.
“We will congratulate anyone who is successful due to their skill, their innovation, that they on their merits can attract customers to their products.
“However, dominant companies are not allowed to abuse their strong market position to hinder competition in the market,’’ Vestager said.
The EU’s decision might bolster Apple’s position in the various lawsuits the company is tied up in against Qualcomm over royalty payments and patent infringements.