EU fines Qualcomm in 1B euros for abuse of dominant market position on LTE baseband chipsets

The European Commission has fined Qualcomm €997m for abusing its market dominance in LTE baseband chipsets. This fine was announced today. Qualcomm says that will appeal to the General Court of the European Union.

Baseband chipsets enable smartphones and tablets to connect to cellular networks and are used both for voice and data transmission. LTE baseband chipsets comply with the 4G Long-Term Evolution (LTE) standard.

“Qualcomm prevented rivals from competing in the market by making significant payments to a key customer on condition it would not buy from rivals. This is illegal under EU antitrust rules” said European Comission.

Commissioner Margrethe Vestager, in charge of competition policy, said that “Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance. 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.

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 fine is € 997 439 000, representing 4.9% of Qualcomm’s turnover in 2017. The fine has been calculated on the basis of the value of Qualcomm’s direct and indirect sales of LTE baseband chipset in the European Economic Area (EEA). The duration of the infringement established in the decision is five years, six months and 23 days.