Qualcomm fined $ 272 million in the latest antitrust fine in the EU

The EU has fined Qualcomm a total of € 242 million (about $ 272 million) for selling predator-priced 3G modem chips to drive out a competing supplier, Icera, from the market. The European Commission said the company had used its market dominance to sell chips for mobile Internet electronic keys at below-cost prices between 2009 and 2011. This announcement marks the end of the nearly four-year the EU on Qualcomm's shares.

EU Competition Commissioner Margrethe Vestager said "Qualcomm's strategic behavior has prevented competition and innovation in this market and has limited consumer choice in a sector where demand and market potential innovative technologies are huge "

The European Union's investigation revealed that Qualcomm sold its 3G chips to Huawei and ZTE at below-cost prices, just when Icera was becoming a viable competitor. The Commission described these concessions as "targeted" and stated that they "allowed [Qualcomm] maximize the negative impact on Icera's business. "

Today's fine is only the latest in a series of antitrust rulings that Qualcomm has been hit in recent years. Earlier this year, a US judge ruled that Qualcomm had charged "unreasonable" royalties for its patents and criticized its practice of offering discounts to customers who agreed to use its chips exclusively. The latter practice was also fined $ 1.2 billion, also issued by the EU, last year. Regulators in South Korea, China and Taiwan have fined Qualcomm for various anti-competitive practices.

However, unlike previous antitrust decisions, today's fine is unlikely to have an ongoing impact on Qualcomm's net results. According to Qualcomm, predatory pricing in the EU ended in 2011 and in today's decision the Commission has not criticized any of the company's current practices or the amounts it charges for its patents. or its licenses. Instead, the fine, which accounts for 1.27% of the company's revenue in 2018, is designed to deter other companies from attempting the same thing.

Unfortunately for Icera, the fine came too late to save his modems business. The company was bought by Nvidia in 2011, which left the modems market in 2015. Nvidia hoped to integrate the company's modems with its Tegra processors, but the plans never materialized.

Now that we are moving towards the 5G era, the modems market should lose another player. Intel has announced that it would leave the 5G modems sector after Apple and Qualcomm have ended their long legal battle, leaving only a handful of players to compete with Qualcomm's 5G modems.