After issuing a record €2.42 billion ($2.71 billion) fine against Google for “abusing its dominance in search” in June 2017, Margrethe Vestager, the European Union’s antitrust commissioner, slapped US chipmaking giant Qualcomm with a €997 million ($1.23 billion) antitrust fine Wednesday after it declared that the company’s arrangement for Apple Inc. to exclusively use its chips in its smartphones and other consumer devices was illegal, according to the Wall Street Journal.
The EU declared that Qualcomm had abused its dominant position by paying billions of dollars to Apple from 2011 to 2016 in a secret agreement whereby Apple wouldn’t buy chips from rivals, making it next to impossible for other companies to compete.
Margrethe Vestager
Of course, Qualcomm can still appeal the decision. But judging by the hard line that EU antitrust authorities have taken against Google, Facebook, Apple and other US tech giants, its chances of prevailing aren’t great…
“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,” said EU antitrust chief Margrethe Vestager. “This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were.”
Qualcomm can appeal the EU’s decision to the bloc’s highest courts, though the company would still have to pay the fine and change any conduct while the court case plays out, a process that can take years.
The decision has no repercussions for Apple because the accusations don’t center around a cartel.
Shares of Qualcomm fell more than 2% after the ruling. Vestager found that Apple was “seriously thinking” of switching to Intel chips during the term of the agreement, but the company was forced to wait until it expired to begin sourcing the chips, as Bloomberg pointed out.
