The EU Levies $1.23 Billion Fine Against Qualcomm

On Wednesday, the European Union levied a $1.23 billion (997 million euro) fine against Qualcomm, for manipulating the market for its computer chips.

Margrethe Vestager, who is a commissioner for the EU, said that Qualcomm, which is a San Diego-based chipmaker, effectively keep its rivals out of the market by paying Apple billions of dollars to use their chips in Apple’s mobile devices. She further said that by doing this Qualcomm controlled the market.

While Vestager doesn’t accuse Qualcomm of actually making payments to Apple, she says that the company reduced its prices of computer chips in exchange for Apple agreeing to use only their chips in Apple’s popular mobile devices. The EU sees this as being the same as making actual payments, and contends that this occurred between 2011 and 2016.

The chips in question where ones that allow mobile devices to connect to cellular networks. During the 5-year period in which the EU believes the violations occurred, Qualcomm controlled more than 90% of the market for these chips.

No fines were levied against Apple, despite it playing an active role in the alleged manipulation. Vestager said that the EU had in its possession internal Apple documents that showed that the company was considering buying comparable chips from Qualcomm’s rival Intel, but we’re unable to do so until the agreement between it and Qualcomm expired. She further said that only near the conclusion of Apple’s agreement with Qualcomm did the company start using chips from other makers.

Vestager went on to say that she believes the market for these kinds of chips is now competitive.

Qualcomm said in a statement that it strongly disagrees with the EU’s conclusion, and that it will appeal the fine. It also said that the fine would not have any effect on its current operations.

Vestager, though, hopes that the fine will deter other companies from engaging in similar behavior in the future.