The European Commission has levied a fine of €997 Million, approximately $1.2 Billion, against U.S. chipmaker Qualcomm Inc. for violating antitrust laws in a series of deals with Apple by “abusing its market dominance in LTE baseband chipsets.”
According to the European Union (EU), Qualcomm paid Apple billions of dollars to make the iPhone-maker exclusively use its 4G chips in all its iPhones and iPads, reducing competition from other competing manufacturers in the LTE baseband chip industry like Intel.
“This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were. This is illegal under EU antitrust rules and why we have taken today’s decision,” EU competition commissioner Margrethe Vestager said in a press statement.
Apple received payments from Qualcomm for approximately 5 years between 2011 and 2016.
The fine imposed on the chip maker is hefty, but won’t hurt Qualcomm’s bottom line significantly as it represents 4.9 percent of the company’s turnover in 2017, according to the EU’s antitrust commission.
“We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers,” Qualcomm General Counsel Don Rosenberg said in a statement. “We have a strong case for judicial review, and we will immediately commence that process.”
Not just one, Qualcomm is facing a patent fight with Apple over chip royalties, and simultaneously fending off a $100 billion hostile takeover from rival chipmaker Broadcom, but it rejected the bid last November, saying it ‘dramatically undervalued’ the company.