Europe fines Qualcomm $270 million for ‘predatory pricing’

Europe has hit Qualcomm with a €242 million ($271 million) fine, saying the U.S. chipmaker used “predatory pricing” to drive a competitor out of the market for 3G phone hardware.

“Qualcomm sold these products at a price below cost to key customers with the intention of eliminating a competitor,” said Margrethe Vestager, the European Commission’s top antitrust official.

The Commission said that Qualcomm was able to gain about a 60% share of the market by undercutting a UK rival called Icera.

The main infraction, which occurred between 2009 and 2011, entailed Qualcomm selling components for 3G smartphones below cost to Chinese cell phone makers Huawei and ZTE.

Qualcomm said it would appeal the decision, which it described as “meritless.”

“The Commission spent years investigating sales to two customers, each of whom said that they favored Qualcomm chips not because of price but because rival chipsets were technologically inferior,” general counsel Don Rosenberg said in a statement. “This decision is unsupported by the law, economic principles or market facts.”

US chipmaker Nvidia bought Icera in 2011, and would later sue Qualcomm, saying the company’s practices drove Icera out of the marketplace.

This isn’t the first time Europe has fined Qualcomm. In 2018, the European Union levied a €997 million ($1.1 billion) fine against Qualcomm, alleging it paid key customers to sign exclusivity agreements.

China’s anti-monopoly bureau also fined Qualcomm $975 million in 2015 for violating its antitrust laws.

Europe has emerged as a key battleground for tech because of its tough rules on data protection, hate speech, taxation and competition issues. Apple, Amazon Google and Facebook have all come under scrutiny.

The Commission is investigating Amazon over its use of data from independent sellers. Google has been fined €8.2 billion ($9.2 billion) in total by Europe since 2017.

Vestager previously examined Apple’s purchase of music app Shazam but eventually approved the deal. And in 2016, the European Union ordered Apple to repay €13 billion ($14.6 billion) in tax breaks to Ireland.

Ireland’s Data Protection Commission is investigating Facebook over data breaches and other issues.

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