Following an investigation by the European Commission, Qualcomm has been found guilty of using its market dominance to undercut prices in a bid to drive its UK rival, Icera, now part of Nvidia Corp, out of the market.
EU regulators ruled that the company sold its 3G chips below cost between 2009 and 2011 to Chinese firms Huawei and ZTE to specifically hobble Icera, who was emerging as a serious competitor.
The announcement of the £217 million fine, which represents 1.27% of the company’s 2018 turnover, marks the end of a four-year investigation by the EU Commission into the company’s actions, which it described as “targeted”.
Speaking of Qualcomm’s pricing tactics the commission said they “allowed [Qualcomm] to maximise the negative impact on Icera’s business.”
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EU Commissioner, Margrethe Vestager, said: “Qualcomm sold these products at a price below cost to key customers with the intention of eliminating a competitor.
“Qualcomm’s strategic behaviour prevented competition and innovation in this market and limited the choice available to consumers in a sector with a huge demand and potential for innovative technologies.
“Since this is illegal under EU antitrust rules, we have today fined Qualcomm €242 million.”
In response to the fine, Qualcomm said it would appeal the decision and instead of paying the fine it would instead offer a financial guarantee while its appeal is pending.
Don Rosenberg, executive vice president and general counsel of Qualcomm, said: “The Commission spent years investigating sales to two customers, each of whom said that they favoured Qualcomm chips, not because of price but because rival chipsets were technologically inferior.
“This decision is unsupported by the law, economic principles or market facts, and we look forward to a reversal on appeal,” he added.
This is not the first time the tech giant has fallen foul of regulators in recent years. Qualcomm has been fined by competition regulators in China, South Korea, Taiwan, the UK and US for anti-competitive behaviour.
This is the second fine issued to the business by the EU Commission, last year it was penalised £872m for paying Apple to exclusively use its chips, a tactic aimed at shutting its rivals out of the market. At the start of the year, the company was taken to task by a US judge who ruled that it charged “unreasonably high” royalties for its patents.
Qualcomm is not the only company in the spotlight for anti-competitive practices, a few days before the EU commission announced this fine it said it would be investigating online retailer Amazon over its dual role as both a marketplace for vendors and competitor to them too.