EU Fines Qualcomm Over $1 billion For Buying Apple’s Loyalty


Qualcomm

Chip manufacturing giant, Qualcomm, has been slammed with a $1.2 billion (997 million euros) fine for paying off Apple between 2011 and 2016. According to the European Union’s antitrust arm, these payments meant that only Qualcomm’s chip was used in iPhones and iPads within the period and this is illegal. The fine represents 4.9% of Qualcomm’s revenue in 2017, the EU said.

EU Competition Commissioner Margrethe Vestager told reporters at a Brussels press conference.

“Apple was seriously thinking of switching” from Qualcomm to Intel chips “which would have made a big difference to Intel” but couldn’t do so until its Qualcomm pact was about to expire in September 2016, “This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were,”…”We’re talking about one of the biggest and most important customers in this market.”

EU Commissioner of Competition, Margrethe Vestager give an interview at the EU Headquarters in Brussels, on September 4, 2017.

Our best guess is that Intel was most affected by Qualcomm’s actions because the company has been supplying iDevices since early last year when iPhone 7 was launched.  Interestingly, Apple has not been convicted of any wrongdoings and they are free. However, Qualcomm said in a statement

“Qualcomm strongly disagrees with the decision and will immediately appeal it to the General Court of the European Union,”…”this decision does not relate to Qualcomm’s licensing business and has no impact on ongoing operations.”

A lawyer at White & Case, Brussels – Assimakis Komninos said that “This is a huge fine by any standards and shows that Commissioner Vestager is starting 2018 very aggressively,”.

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