EU fines Qualcomm €242 mil for ‘predatory’ pricing

A Qualcomm sign seen during the China International Import Expo, at the National Exhibition and Convention Center in Shanghai, China Nov 6, 2018. (Reuters pic)

BRUSSELS: The EU hit US chipmaking giant Qualcomm with an antitrust fine of €242 million (US$271 million) Thursday, in another blow against a tech titan that is fighting competition battles in Asia and the US.

The fine is the second mega penalty levelled against Qualcomm by Brussels, which made it pay €997 million in January 2018.

“Our investigation found that Qualcomm abused” its market “dominance between mid-2009 and mid-2011 by engaging in predatory pricing,” an EU statement said.

The chips in question in the EU case “are key components so that mobile devices can connect to the internet,” EU anti-trust commissioner Margrethe Vestager said in a statement.

“Qualcomm sold these products at a price below cost to key customers with the intention of eliminating a competitor,” she added.

The EU said that Qualcomm sold the chipsets to Chinese giants Huawei and ZTE, strategic customers, “with the intention of eliminating Icera, its main rival at the time”.

Icera was acquired in May 2011 by the US technology company Nvidia, which decided in 2015 to liquidate the business that was subject to the Commission’s investigation.

In a statement, Qualcomm said it would appeal the decision in order to “expose the meritless nature of this decision”.

The EU fine “is unsupported by the law, economic principles or market facts, and we look forward to a reversal on appeal,” said Don Rosenberg, general counsel of Qualcomm.

Huawei and ZTE chose Qualcomm chips “not because of price but because rival chipsets were technologically inferior,” Rosenberg insisted.

Buried the hatchet

The blow against Qualcomm comes after a US court ruled in May that the firm “strangled competition” and must renegotiate price deals in a case with major implications for the smartphone market.

In recent years, Qualcomm was also slapped with fines in South Korea and Taiwan over anti-trust concerns.

Qualcomm meanwhile in April buried the hatchet with Apple after two years of legal battles over royalties.

For two years, the companies had fought a multi-front brawl that could have required Qualcomm to pay billions.

Vestager, the EU’s competition czar, has received specific criticism by US Donald Trump for her series of cases against US tech giants that also include Apple, Google and Amazon.

The Commission imposed three major fines on Google totalling €8.25 billion in cases involving its Android operating system, Google Shopping and its advertising network AdSense.