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Qualcomm has been fined €997 million over their abuse of their dominant market position

Sound a lot like Intel doesn't it

Qualcomm has been fined â?¬997 million over their abuse of their dominant market position

Qualcomm has been fined €997 million over their abuse of their dominant market position

The European Commission has hit Qualcomm with a €997 million (around £700 million) fine for abusing their market dominance in the LTE market, an issue that came to light after complaints from Apple. 

This fine equates to 4.9% of Qualcomm's turnover in 2017, acting as a deterrent for future illegal action and anti-competitive practices. The commission's investigation covered the years between 2011 and 2016, a time where Qualcomm had a 90% market share of the global LTE baseband chipset market. During this time Qualcomm was found to have made agreements with companies like Apple that prevented them from changing suppliers, offering conditional payments if the company used Qualcomm baseband chipsets exclusively.   

Companies that had signed agreements with Qualcomm were deterred from using competing products, preventing Qualcomm's rivals from gaining market share and stifled any potential innovations that these companies could bring to the market. Preventing companies from using a competitor's products by making large payments is illegal under EU anti-trust laws. 

Below is a comment from EU Commissioner Margrethe Vestager;


      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.

  

Internal Apple documentation was found during this investigation that shows that Apple was seriously considering Intel-made baseband chipsets as an alternative to Qualcomm, with Qualcomm's exclusivity deal playing a huge role in this decision, as Intel would have to return a lot of money to Qualcomm if they moved any of their business to Intel.   

Apple eventually decided to use Intel's chipsets on some of their products, but only after September 2016 when "cost of switching under its terms was limited", which means that Apple would likely have moved to use Intel chipsets sooner had Qualcomm's illegal agreement had not been in place. 

 

Qualcomm has been fined â?¬997 million over their abuse of their dominant market position  

Right now US and Chinese lawsuits regarding this matter are ongoing, which means that the legal ramifications of Qualcomm's exclusivity deals are still ongoing. Other monopoly watchdogs are also investigating the company. 

You can join the discussion on Qualcomm getting hit by a €997 million EU anti-trust fine on the OC3D Forums.  

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Most Recent Comments

24-01-2018, 12:50:51

brokenmachine
4.9% of its 2017 income. For a practice that was going on for 5 years.

What exactly about that is a deterrent?

4.9% of my income in 2017 is about £784. It's a lot to me because I'm poor, but I also believe that if I had set out to strictly save money, I could have acquired that £784 within that year, meaning it wouldn't have been financially painful for me. I imagine if I added up money spent on coffees and the things that weren't essential, it would be a similar amount.

The companies that do this can afford to lose a lot more than 5% and while heads may have rolled for the embarrassment and being caught, the company and the controlling people within are likely unaffected by this.

How about their entire profits during the period this illegal action was taking place. 5 years of profits and prison terms for all involved would devastate them and that, that would be a deterrent to other companies and individuals - though they're still going to try any means of exploitation for profit.

The advancements and opportunities erased by this are unknown but that doesn't mean the loss isn't important. I am sure the cost of this is far greater than the pathetic financial penalty.

Were Apple really not smart enough to see the illegalities of this agreement at the time? Have they been selective about when to bring this up?Quote

25-01-2018, 03:34:08

Avet
They should punish companies for year's revenue. It would be much more competitive market.Quote
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