Qualcomm responds to EU's $1.2 billion fine: will appeal immediately

Source: Content from Sina Technology, thank you.

Beijing time, January 24th evening news, in response to the EU's antitrust fine of 997 million euros (about 1.229 billion US dollars) today, Qualcomm subsequently responded that it would immediately appeal.

The European Commission announced earlier today that it had fined Qualcomm $1.229 billion for abusing its market dominance by paying Apple in exchange for exclusive use of Qualcomm's chips in its smartphones and tablets.

Qualcomm subsequently said that it strongly opposed the EU's decision and would immediately appeal to the EU's intermediate court, the General Court. Qualcomm also said that the EU's decision would not affect the company's licensing business or its continued operations.

Don Rosenberg, executive vice president and general counsel of Qualcomm, said: "We believe that the agreement we signed with Apple does not violate EU competition law, does not prevent market competition, and does not affect the choices of EU consumers. We have sufficient reasons to seek a judicial review and we will initiate the procedure immediately."

The EU fined Qualcomm $1.229 billion, accounting for about 5% of last year's revenue

Beijing time, January 24th evening news, the European Commission announced today that it has decided to fine Qualcomm 997 million euros (about 1.229 billion US dollars) because Qualcomm abused its market dominance by paying Apple in exchange for Apple's exclusive use of Qualcomm chips in its smartphones and tablets.

The European Commission's antitrust investigation into Qualcomm began in July 2015. The EU announced at the time that it had formally launched two antitrust investigations against Qualcomm to assess whether Qualcomm abused its market dominance to force consumers to use its chips.

The first investigation is to verify whether Qualcomm provided financial incentives to customers to ensure that they use Qualcomm's exclusive baseband chips. The second investigation is to evaluate whether Qualcomm engaged in "predatory pricing" (Predatory Pricing), setting prices below cost to force competitors out of the market.

In December 2015, the European Commission issued a "statement of objection" to Qualcomm, formally accusing Qualcomm of using its dominant position in the mobile phone chip market to suppress competitors.

The European Commission said at the time: "Since 2011, Qualcomm has paid a large amount of money to a major smartphone and tablet manufacturer to ensure that the manufacturer has exclusive use of Qualcomm's chipsets." In addition, from 2009 to 2011, Qualcomm also sold some models of chipsets at below cost to suppress its competitor Icera (which has been acquired by Nvidia).

The European Commission said today that Qualcomm's exclusive payment method began in 2011 and lasted for more than five years, allowing Qualcomm to further consolidate its market position.

"Qualcomm has illegally excluded competitors from the LTE baseband chipset market for more than five years, further consolidating its market dominance," EU antitrust commissioner Margrethe Vestager said in a statement. "Qualcomm paid billions of dollars to its core customer Apple to ensure that Apple no longer uses similar products from other companies."

Before 2016, Apple had been using modem chips exclusively provided by Qualcomm. Starting in 2016, Apple began using such chips provided by Intel in its iPhone 7 and iPhone 7 Plus. Last year, it was reported that Apple's next-generation iPhone would no longer use any chips provided by Qualcomm.

Vestager also said: "This means that no other competitor has the ability to compete with Qualcomm in this market, no matter how good their products are. Qualcomm's behavior prevents consumers and other companies from having more choices and hinders market innovation."

The European Commission said the $1.229 billion fine was equivalent to 4.9% of Qualcomm's 2017 revenue.

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