Antitrust court overturns €1 billion fine against Qualcomm

Four years after a decision by the European Commission, the European justice forces the latter to swallow its hat against Qualcomm. According to the European Union court, the rights of defense of the world’s number one smartphone chip maker had not been respected during the proceedings that pitted the company against Brussels between 2015 and 2018.

As a result, the second highest court in Europe on Wednesday overturned the heavy fine of 997 million euros which had sanctioned the American company for “abuse of a dominant position”.

In detail, the court accuses the services of Margrethe Vestager of several irregularities at different stages of their investigation. On the one hand, they should have recorded certain exchanges with third parties involved in the case. On the other hand, they should have heard Qualcomm a second time after having, in the course of the investigation, “modified the grievances” initially retained.

Billions of dollars” to Apple

The facts date back to the period 2011-2016. The European Commission accused Qualcomm of having paid “billions of dollars” to Apple in exchange for a total exclusivity on the supply of 4G chips for iPhones and iPads. According to Brussels, the American group held more than 90% of the global market for these components and “no competitor was able to compete effectively, regardless of the quality of its products.

To support its case, the Commission advanced internal documents from Apple showing that the Apple brand had indeed studied the possibility of sourcing from another manufacturer of 4G chips, in this case Intel. But that the agreement signed with Qualcomm had discouraged any change, until its expiration in 2016.

A non-definitive ruling

On Wednesday, the EU court also noted that Brussels’ decision omitted a point that was acknowledged in the indictment: no technical alternative existed for Apple with respect to iPhones.

This court ruling is not necessarily final, however. The Commission can still turn to the Court of Justice of the European Union for a final verdict. In any case, this rebound has no impact on another case that had seen the Commission impose another fine (242 million euros) on Qualcomm in 2019 for selling below their production costs some of its chips.