SAN FRANCISCO — Qualcomm plans to appeal a $1.2 billion fine handed down by the European Union regulators related to a former modem chip supply agreement with Apple, the chipmaker said Wednesday (Jan. 24).
The decision, which comes amid strained relations between Qualcomm and Apple, brings the total amount of fines levied against Qualcomm in recent years to nearly $4 billion.
The European Commision (EC), the EU's legislative and regulatory arm, said its investigation, which lasted for more than two years, concluded that Qualcomm paid Apple billions of dollars to keep it from buying LTE baseband chips from Qualcomm's rivals, violating EU antitrust rules.
"Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance," said Margrethe Vestager, an EC commission in charge of competition policy, in a statement posted on the EC website Wednesday.
Vestager said payments made by Apple to Qualcomm under a contract in place from 2011 to 2016 were made on the condition that Apple would exclusively use Qualcomm's baseband chipsets in all its iPhones and iPads.
Qualcomm (San Diego) is far and away the market leader in baseband chipsets, though it faces renewed competition from rivals including MediaTek and Intel.
The EC decision is the latest in a string of antitrust fines handed down against Qualcomm by various jurisdictions in recent years. Qualcomm was fined more than $900 million by South Korea antitrust regulators in 2016, one year after agreeing to pay $975 million to resolve an antitrust dispute in China. Last year, Taiwan fined Qualcomm $774 million for violations of antitrust policy and the U.S. Fair Trade Commission filed suit against Qualcomm over its sales and marketing practices.
Meanwhile, Qualcomm's relationship with Apple has also deteriorated, coming to a head last year when the firms traded lawsuits over a contract dispute that caused Taiwanese ODMs to withhold payments hundreds of millions of dollars of payments owed to Qualcomm after Qualcomm did not pay money Apple says it owed to the consumer electronics giant.
In a press statement Thursday, Qualcomm said it strong disagrees with the EC decision.
"We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers," said Don Rosenberg, Qualcomm executive vice president and general counsel. “We have a strong case for judicial review and we will immediately commence that process.”
Qualcomm added that the EC decision does not relate to Qualcomm’s licensing business and has no impact on ongoing operations.
— Dylan McGrath is the editor-in-chief of EE Times.
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