EU Fined Qualcomm
EU (European Union) has fined Qualcomm on Wednesday for violating antitrust issues for exclusive deals with Apple which contains paying Apple for using its 4G chips.
The antitrust regulators for EU have set the fine at 997.4 million euros (US$1.23billion). But big as it is, the penalty could have been more significant. Qualcomm could have faced a fine as high as 10% of its annual revenue, i.e., around $22billion in 2017.
The US chipmaker is accused of paying Apple billions of dollars between 2011 and 2016 to use its 4G chips on iPhone and iPad exclusively
“This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were,” by EU competition commissioner Margrethe Vestager in press statement. “This is illegal under EU antitrust rules and this is why we have taken today’s decision.”
At a press conference in Brussels, Vestager also said that Qualcomm’s actions had shut out its rival Intel, which makes their 4G chips. “It would have cost Apple a lot of money to switch suppliers while the deal was in place.” Apple began using Intel’s modem in its iPhone7 and iPhone 7Plus devices after its agreement with Qualcomm ended.
Further on Wednesday Qualcomm stated that it “strongly disagrees” with the EU decision and will appeal it immediately.
“We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers.” Said Don Roserberg, executive vice president and general counsel of Qualcomm, in a statement.
Apple and Qualcomm are fighting amongst themselves !
After the agreement ended, in 2017 Apple filed suit against Qualcomm for roughly $1billion, saying the wireless chipmaker didn’t give fair licensing terms for its technology. In return, Qualcomm responded by suing Apple for patent infringement and seeking a ban on iPhone sales. The US Federal Trade Commission soon followed suit, accusing Qualcomm of forcing Apple to use its chips exclusively in exchange for lower licensing fees, excluding competitors and harming competition.
Qualcomm rejected the bid from Broadcom.
Broadcom is also a wireless chipmaker just like Qualcomm. Qualcomm is facing down a $100billion plus hostile takeover from its rival chipmaker company Broadcom. Qualcomm has rejected the offer last November, saying it “dramatically undervalued” the company. This brings Qualcomm amongst the biggest chipmaker companies.