European Commissioner for Competition Margrethe Vestager imposed a €997 million fine on American chipmaker Qualcomm for the period between 2011-2016 when the company paid Apple to exclusively to abuse its dominant market position and only use Qualcomm’s chips.
Qualcomm is the largest supplier of 4G chips in smartphones.
“Qualcomm has kept competitors out of the market for the past five years and reinforced its market dominance,” said Vestager during a European Commission press conference after the weekly College meeting.
“By paying Apple, it was impossible for competing parties to compete with Qualcomm and it also excluded consumers and companies from more choice and innovation,” said Vestager, who added that the European Commission started looking into the payments to Apple in 2015.
Asked whether Apple and Qualcomm’s acted in collusion with one another to form a cartel, Vestager said the case only concerns Qualcomm’s actions. Apple and the latter is not expected to get fines.
Qualcomm can appeal against the ruling, but only after they have paid the fine.
The Commission’s fine is the fourth levied against Qualcomm in the last three years. Taiwan imposing a €626 million fine on the company in 2017, which was preceded by South Korean fine amounting to €691 million euros in 2016 and a €790 million fine by China in 2015.
In each case, Qualcomm attempted to appeal the ruling.
Legal battle with Apple
Despite Qualcomm’s intentions to use its market position, the company was sued by Apple for being paid less than what had been agreed, leaving Qualcomm 1 billion in debt. The two went to court last October.
After the contract with Qualcomm expired in 2016, Apple switched to chips from Intel. In addition, the European Commissioner also points out that market dominance is not in itself prohibited, but it denies other parties from having the same access to a market.