The commission announced that it had fined Qualcomm yesterday (24 January) for preventing 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 anti-trust rules”, the commission said.
The commission found that Qualcomm had held a dominant position in the global market for LTE baseband chipsets between at least 2011 and 2016, with market shares of more than 90 percent for the majority of the period.
It said: “The market is also characterised by high barriers to entry. These include the research and development expenditure required before a supplier can launch an LTE chipset and various barriers related to Qualcomm's intellectual property rights.”
Commissioner Margrethe Vestager commented: “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.”
She said: “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 anti-trust rules and why we have taken today's decision."
In January 2017, Apple sued Qualcomm for nearly $1 billion, accusing the chipmaker of “charging royalties for technologies they have nothing to do with”.
Apple said that Qualcomm had withheld nearly $1 billion in payments from it as retaliation for “responding truthfully to law enforcement agencies investigating them,” alluding to anti-trust investigations in China and South Korea that have cost Qualcomm billions of dollars.
Last week, the commission approved Qualcomm’s acquisition of NXP, subject to full compliance with a series of commitments made by Qualcomm.
The commission was concerned that the merged entity would make it more difficult for other supplies to access NXP’s MIFARE technology by raising licensing royalties or by ceasing to licence MIFARE altogether.
The commission allowed the merger after Qualcomm committed to offering licences to NXP’s MIFARE technology and trademarks for an eight year period, on terms that are “at least as advantageous as those available today”.