European Competition Regulator Fines Qualcomm With €997m Over iPhone Chip Payments of Apple

Qualcomm has promised to fight the fine that was imposed by the competition authority in Europe amounting to almost a billion euros. Today, the competitions regulator ruled that the company broke the law by paying Apple to make use of the company’s own chips in iPads and iPhones.

The competition commissioner of the European Commission said that the chipmaker shut out rivals from the market for five years illegally, abusing the company’s dominant position by making the said payments.

Margrethe Vestager, the competition chief, stated: “Qualcomm paid billions of US Dollars to a key customer, Apple, so that it would not buy from a rival.

“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 is 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.”

The said agreement between Apple and Qualcomm which the EC says broke the European antitrust laws occurred between 2011 and 2016.

Qualcomm has said that it strongly disagrees with the said decision and will appeal against it.

“We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers,” stated Dan Rosenberg, the executive vice president and general counsel of the firm. “We have a strong case for judicial review and we will immediately commence that process.”

The fine is nearly five percent of the annual turnover of Qualcomm last year.

It is the latest in a series of high profile decisions that were made by Vestager against various tech companies in the United States on competition grounds. A separate investigation regarding predatory pricing is also continuing with Qualcomm, which is in the midst of fighting off a hostile takeover approach made by Broadcom.

Shares in Qualcomm were around one percent lower before the opening of the markets in New York.