$1.2 Billion Fine To Qualcomm For Chip Deal With Apple
Qualcomm has come under the scanner of regulatory bodies with the EU antitrust regulators slapping a $1.23 billion fine on it. The fine which is almost 4.9% of Qualcomm’s turnover for 2017 was levied on Wednesday for huge payments made by them to Apple from 2011 to 2016. The payment running in billions of US dollars was done for ensuring that Apple’s iPads and iPhones would use baseband chipsets brought exclusively from Qualcomm preventing the entry of any other rival like Intel into the market.
Qualcomm’s dealings with Apple are being scrutinized by US Federal Trade Commission too. The verdict given by EU is likely to make Qualcomm greatly susceptible in a $103 billion inimical bid made for it by chipmaker Broadcom Ltd. Qualcomm is also involved in a case of predatory pricing where it has been charged of marking its selling price lower than cost to eliminate another rival Icera from the market. The ruling on this will be given by EU regulator in the following months.
There has been a lot of pressure on European Commission in recent times in view of an appeal case sent to the EU court. The case was with regard to EUR 1 billion fine imposed on Intel in 2009 for making payment to computer manufacturers for sourcing all their chips solely from them. Another appeal has been made by Google against a fine of EUR 2.4 billion imposed on them for using anti-competitive tactics.
The legal wrangle between Qualcomm and Apple has been going on since the past one year. The tech giant has filed a $1 billion suit against Qualcomm for apparently withholding patent royalty rebates from them.
Imposing the fine on Qualcomm has been the European Commission’s first verdict on anti-competitive practices after the ruling given in the Intel case in September last year. Pre-market trading showed a dip in Qualcomm shares by 5%.