Qualcomm has been fined a sum of €997 million by the European Union Competition Commission for paying Apple to exclusively use its chips. Qualcomm says it «strongly disagrees with the decision.»
In 2015, Qualcomm was accused of abusing its dominant market position, prompting the European Union’s Competition Commission to open an investigation into the matter. Today, that investigation has concluded, with Qualcomm being fined a sum of €997,439,000 ($1.23B) – or 4.9% of its turnover in 2017.
As per the Commission, Qualcomm abused its market position between 2011 and 2016 by committing itself “to make significant payments to Apple on condition that the company would exclusively use Qualcomm chipsets in its ‘iPhone’ and ‘iPad’ devices” via the means of an agreement signed between the two companies.
European Union Competition Commissioner Margrethe Vestager elaborated in a press statement:
“Apple was seriously thinking of switching,” Vestager told reporters at a press conference in Brussels per Bloomberg, adding that it would have “have cost Apple a lot of money” to quit Qualcomm’s agreement:
Interestingly, Apple began using Intel modems with iPhone 7 and 7 Plus, soon after the Qualcomm agreement had ended.
In a press statement, Qualcomm said that it “strongly disagrees with the decision,” and that it plans an appeal. The decision will have no impact on its ongoing operations:
It’s also noteworthy that Qualcomm sued Apple in November last year accusing the company of sharing trade secrets with Intel.
Vestager added that the fine served as a warning for other companies: “Don’t go there.” The €997M fine is EU’s third-highest; Google was fined a record-breaking €2.42B in June last year for antitrust violations.
Qualcomm’s troubles seem endless as its profits dwindle amid the legal battles with Apple, all the while it faces a $130 billion hostile takeover bid from Broadcom .
