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European Commission fines chipmaker Qualcomm for anticompetitive practices

Friday, 19 July, 2019 - 12:19

The European Commission has fined the US giant Qualcomm 242 million for selling components at prices below their production costs, the second hefty fine meted out to the chipmaker in the last year, following a fine of nearly 1 billion euros handed down by Brussels for anticompetitive practices in the 2018.

The European Commission accuses Qualcomm of having tried to squeeze out its competition, British company Icera in particular, by selling its products below the cost of production.

“Qualcomm’s strategic behavior has prevented competition and innovation in this market and has limited consumer choice in a sector where the demand and potential for innovative technologies are enormous,” said Margrethe Vestager, Commissioner for Innovation and Competition Policy. The fine represents 1.27 percent of the company’s turnover in 2018.

The European authorities criticiced Qualcomm for its practices regarding the sale of “baseband chipsets”, components that enable smartphones to connect to the mobile network. They are used in voice calls, but also for transmitting data online. The components involved in the case complied with the Universal Mobile Telecommunications System (“UMTS”), the standard used for 3G connections.  The goal of the American company was, according to the European Commission, to “eliminate” Icera. The British company was finally bought by Nvidia in 2011.

This fine follows another sanction pronounced by Europe against Qualcomm at the beginning of 2018. At the time, the American company paid a fine of 997 million euros for anti-competitive practices. The European Commission has also been investigating Broadcom for two the last two months, another giant component maker for TVs and modems. In a press conference in Brussels, Margrethe Vestager assured that the first results of this procedure would be made public in the autumn.



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