Qualcomm fined 997m by EU for paying Apple to exclusively use its chips

US chipmaker Qualcomm continues to be fined 997m (872m) by EU antitrust regulators for paying Apple to use only its chips inside the iPhone, locking out rivals for instance Intel.

The European commission launched a study in July 2015, covering the period from 2011 to 2016, taking a look at Qualcomm’s dominance inside market for modems and chips expected to connect handsets to 4G cellphone networks. It issued a charge sheet five months later.

“Qualcomm illegally shut out rivals through the niche for LTE baseband chipsets in excess of five-years, thereby cementing its market dominance,” said European competition commissioner Margrethe Vestager.

“Qualcomm paid billions of Cash with a key customer, Apple, in order that it wouldn’t obtain rivals. These payments are not just reductions in price C we were holding made over the condition that Apple would exclusively use Qualcomm’s baseband chipsets to all its iPhones and iPads.”

The fine represented 4.9% of Qualcomm’s 2017 turnover, the commission said, less the utmost possible fine of 10% of the company’s 15.8bn annual revenue.

The company said it would seek a judicial review. Qualcomm executive vice-president and general counsel Don Rosenberg said: “We are confident this agreement would not violate EU competition rules or adversely affect market competition or European consumers.

“We contain a strong case for judicial review and we’ll immediately commence that process.”

Separate through the EU’s investigation, Apple and Qualcomm are stuck a wide-ranging legal battle on the latter’s business practices. In January 2017, Apple sued Qualcomm for $1bn, arguing the company overcharged for chips without success to be charged $1bn in patent royalty rebates.

Qualcomm accused Apple of infringing several patents relevant to prolonging smartphone battery in July, then sued Apple in November for allegedly violating a computer software licence contract towards the advantage of rival Intel. Apple then accused Qualcomm of patent infringement for battery-life related patents.

The chip manufacturer, that makes components included in scores of Android devices, including those from Samsung, is facing investigations in multiple countries. The united states Federal Trade Commission is additionally investigating Qualcomm’s dealings with Apple, while Mexico has investigated the organization for dealings with Samsung.

The EU is expected to rule inside coming months in another case involving British phone software maker Icera, which has since been bought by chipmaker Nvidia. Qualcomm is charged with selling chips at below cost to drive out Icera.

The EU’s fine may also make Qualcomm more susceptible to chipmaker Broadcom’s $103bn hostile takeover bid. Broadcom argues it is going to smooth rocky relations with customers for example Apple.

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