The American giant electronics compents firm Qualcomm has been fined 997 million euros by the European Commission for allegedly paying Apple to guarantee the exclusive supply of its chips.
Qualcomm, whose headquarters is in San Diego, California, makes most of its revenue from chips for smartphones, and also designs and markets wireless telecommunications products.
The anti-trust fine from Brussels relates to payments made by Qualcomm to Apple in return for which the iPhone maker bought all its chipsets from the company between 2011 and 2016.
“Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance. Qualcomm paid billions of US Dollars to a key customer, Apple, so that it would not buy from rivals. 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,” said the European competition commissioner Margrethe Vestager in a news release.
“This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were. Qualcomm’s behavior denied consumers and other companies more choice and innovation – and this in a sector with a huge demand and potential for innovative technologies. This is illegal under EU anti-trust rules and why we have taken today’s decision.”
The commissioner points out that although Qualcomm is by far the world's largest supplier of LTE baseband chipsets, there are other chip manufacturers active in the market. The computer chipset supplier Intel has tried to challenge and compete with Qualcomm for customers, she says.
Internal documents show that Apple seriously considered switching part of its baseband chipset requirements to Intel, she adds, but decided against doing so because of Qualcomm's exclusivity condition.
In a statement on its website, Qualcomm has said it “strongly disagrees with the decision” and intends to appeal immediately to the European Union’s general court.
“We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers,” said the company’s executive vice president and general counsel Don Rosenberg.