New fine from the European Commission to a large technology company. If yesterday we saw that Vestager pointed towards Amazon , today we see the resolution of a case that they had been investigating since 2015. The Commission has decided to fine Qualcomm with 242 million euros for “abusing its position in the 3G chipset market.
As Commissioner Margrethe Vestager explains: “Baseband chips are key components for mobile devices to connect to the Internet. Qualcomm sold these products at a lower price than cost to key customers with the intention of eliminating a competitor . Qualcomm’s strategic behavior prevented competition and innovation in this market. “
The European Commission concludes that Qualcomm abused its position
The decision is the result of a conflict that occurred between 2009 and 2011 . A period where Qualcomm had, according to the Commission’s data, approximately 60% of the market. Three times more than its closest competitor. This allowed Qualcomm to play with prices and sell chipsets below the cost price to Huawei and ZTE , eliminating any opportunity for these companies to choose their rivals.
As a consequence of this strategy, the manufacturer Icera was expelled from the market even though its components offered a high level of performance. In fact, according to the Commission, Icera was a viable option as a UMTS chipset provider , which led Qualcomm to opt for this predatory pricing strategy.On this basis, the Commission has concluded that Qualcomm’s conduct “had a significant detrimental impact on competition” and prevented Icera from competing in the market. Finally, in 2011, Nvidia bought Icera and four years later he decided to close his line of business.
The fine of 242 million euros represents 1.27% of Qualcomm’s turnover in 2018 , significantly below the maximum of 10% that these types of fines can reach.On behalf of Qualcomm, the company has announced in a statement that it intends to appeal the European Commission resolution and will provide a financial guarantee instead of paying the fine while the appeal is pending. According to Qualcomm, these companies “preferred Qualcomm chips not because of the price, but because rival chipsets were technologically inferior.”