EU fines Qualcomm for paying Apple to exclusively use its chips in the iPhone. The European Union has smacked a 997 million euro (£873 million, $1.2 billion) fine on Qualcomm for paying Apple to utilize its chips solely in the iPhone and the iPad.
The EU’s competition supervisory body declared that the chipmaker had taken benefit from the power and then paved its leading position when it approved to pay Apple to use its chips exclusively from 2011 to 2016.
In this regard, European Competition Commissioner Margrethe Vestager said,
“Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance.”
According to the tweet of Margrethe Vestager,
“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.”
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After signing to this accord stated that no challenger could take on Qualcomm. The agreement certainly act as obstacle and hurt the innovation in the chip sector, Vestager said. on the other hand, it also implies that Apple would have to repay all of Qualcomm’s money if it determined to grant its business to a rival.
The investigation found that Apple had considered switching to Intel, a major competitor, but decided not to in part because of its exclusivity agreement.
Qualcomm says it will request a petition for the ruling.
The executive vice president and general counsel of Qualcomm Don Rosenberg said, “We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers,”
“We have a strong case for judicial review and we will immediately commence that process.” He added.
However, the fine is 4% of Qualcomm’s earnings in 2017.
The EU is independently is doing investigation whether Qualcomm destabilize rivals in the broadband chipset market by offering its chips lower than cost. That investigation is ongoing.