Qualcomm fined €997m over Apple iPhone chip payments by European competition regulator

 
Lynsey Barber
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European regulators say Qualcomm's payments to Apple broke the law (Source: Getty)

Qualcomm has vowed to fight a nearly billion euro fine imposed by the competition authority in Europe, which today ruled that it broke the law by paying Apple to use only its own chips in iPhones and iPads.

The European Commission's competition commissioner said the chipmaker illegally shut out rivals from the market for five years, abusing its dominant position by making the payments.

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"Qualcomm paid billions of US Dollars to a key customer, Apple, so that it would not buy from rivals," said competition chief Margrethe Vestager.

"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.

"This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were. Qualcomm's behaviour denied consumers and other companies more choice and innovation – and this in a sector with a huge demand and potential for innovative technologies. This is illegal under EU antitrust rules and why we have taken today's decision."

The agreement between Qualcomm and Apple which the EC says broke European antitrust laws ran between 2011 and 2016.

Qualcomm has said it strongly disagrees with the decision and will appeal it.

Read more: EU competition chief welcomes “renewed” antitrust debate in Washington

"We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers," said the firm's executive vice president and general counsel Dan Rosenberg. “We have a strong case for judicial review and we will immediately commence that process.”

The fine is almost five per cent of Qualcomm's annual turnover last year

It's the latest in a series of high profile decision by Vestager against several US tech companies on competition grounds. A separate investigation over predatory pricing is also ongoing with Qualcomm, which is in the middle of fighting off a hostile takeover approach by Broadcom.

Shares in the firm were around one per cent lower before markets opened in New York.

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