Qualcomm wins fight against EU antitrust fine worth $1 billion

Author: Foo Yun Chee

LUXEMBOURG (Reuters) – U.S. chipmaker Qualcomm won on Wednesday its fight against a 997 million euro ($1.05 billion) fine imposed four years ago by EU antitrust authorities, a major setback amid attacks by EU antitrust chief Margrethe Vestager on Big Tech.

The European Commission in its 2018 decision found that Qualcomm paid Apple billions of dollars between 2011 and 2016 to use only its chips in all its iPhones and iPads in order to block competitors such as Intel Corp.

The fine against Qualcomm is one of several that Vestager has imposed on companies ranging from Alphabet’s Google unit to banks and truck makers for anti-competitive practices. Apple, Amazon and Facebook are under investigation.

The court, Europe’s second largest, invalidated the EU’s finding and faulted the EU’s competition law enforcement body for its handling of the case.

“A number of procedural irregularities violated Qualcomm’s rights of defense and invalidated the Commission’s analysis of the conduct alleged against Qualcomm,” the judges said.

“The Commission did not provide an analysis supporting the finding that the payments in question actually reduced Apple’s incentive to switch to Qualcomm’s competitors to obtain supplies of LTE chipsets for certain iPad models expected to be released in 2014 and 2015,” they said .

The EU’s competition law enforcement body can refer legal matters to the Court of Justice of the EU (CJEU), the highest court in Europe.

The commission said it would carefully analyze the judgment and its consequences and consider next steps. Qualcomm did not immediately respond to an emailed request for comment.

“The most important conclusion is that the Court recommends the Commission to exercise particular caution in cases of price abuse,” said Assimakis Komninos, partner at the law firm White & Case.

“The commission will now be very hesitant to launch investigations into such cases unless it is really sure,” he said.

This is the second major defeat for Vestager, which in January lost court support for a 1.06 billion euro fine imposed on Intel 12 years ago for squeezing rival Advanced Micro Devices.

Vestager’s next test will take place on September 14, when the Court will hear Google’s complaint against a record antitrust fine of 4.34 billion euros imposed for using the Android mobile operating system to displace competitors.

The case is T-235/18.

($1 = 0.9532 euros)

(Reporting by Foo Yun Chee; Additional reporting by Charlotte Van Campenhout; Editing by Kirsten Donovan and Edmund Blair)