Chip maker Qualcomm has been ordered to pay the European Commission €997 million ($ 1.2 billion) after forging an “illegal” sweetheart deal with Apple, according to the Telegraph.
Over the past few years, the semiconductor company has rewarded Apple for using its mobile network chips in products. But European politicians said this was an unfair practice.
Essentially, Qualcomm has been paying Apple to be its preferred supplier. This, according to the EU Commission, has put rival firms at a disadvantage.
Margrethe Vestager, the EU Competition Commissioner, slammed the deal. She explained that companies like Intel haven’t been able to compete with Qualcomm.
The deal is thought to have run from 2011 to 2016, and meant that Qualcomm could operate as the world’s most powerful mobile processor manufacturer.
Over this five-year period, Apple had kitted out all its iPhones and mobile connectivity-enabled iPads with Qualcomm processors.
At the same time, Qualcomm had a market share of 90 percent. However, in 2016, Apple cancelled the deal and began working with Intel as well as Qualcomm.
Documents obtained by European officials provide more detail into the workings of the deal. They show that Qualcomm threatened to halt payments to Apple if it considered other companies.
Vestager said this deal broke European laws : “Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance,” Ms Vestager said.
“This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were.
“Qualcomm’s behaviour denied consumers and other companies more choice and innovation – and this in a sector with a huge demand and potential for innovative technologies.”
Qualcomm is planning to fight the ruling. Don Rosenberg, general counsel of the firm, said: “We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers.
“We have a strong case for judicial review and we will immediately commence that process.”