European Commission Fines Qualcomm $1.23 Billion for Abusing Dominant Market Position

European Commission Fines Qualcomm $1.23 Billion for Abusing Dominant Market Position

Qualcomm, the chip maker that manufacturers billions of system-on-chips for Android OEMs, spent decades building its Snapdragon empire. But some say the company is abusing its dominance monopolistically and violating anti-competitive laws in multiple countries. Qualcomm has been fighting these lawsuits for quite a while now, but it lost a crucial battle in Europe on Wednesday. The European Commission levied a $1.23 billion fine on the company, finding it guilty of monopolistic behavior in the LTE modem market.

As with most fines issued by the European Commission, it’ll take some time before it’s finalized. Qualcomm has already issued a statement disagreeing with the Commission’s ruling, and says that it plans to appeal the fine to the General Court of the European Union.

“We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers,” said Don Rosenberg, Qualcomm’s general counsel. “We have a strong case for judicial review and we will immediately commence that process.”

Over the past few years, Qualcomm has defended itself against anti-monopoly suits in courts around the world. Competitors and partners in Taiwan, South Korea, and the United States contend that the company is abusing its position across multiple product categories, including LTE modems and smartphone processors.

Much as we’ve seen with companies like Google and Microsoft, once a company’s products reach critical mass, they become the target of increased scrutiny.

Some would say the European Commission’s case is a little different from the rest because it solely focused on the company’s LTE modems whereas others have focused on patents, CDMA technologies, and LTE. Qualcomm’s high-profile spat with Apple, for example, which was uncovered last year in a US Federal Trade Commission (FTC) investigation, showed that Qualcomm had paid Apple royalty rebates to ensure the iPhone maker would exclusively source the chip maker’s LTE modems.

The royalty rebates in and of themselves weren’t technically illegal, but Apple says that Qualcomm issued them with the intention of beating back competitors in the market — primarily Intel. That’s a judicial no-no.

Source: European Commission

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