THE EUROPEAN COMMISSION (EC) has fined Qualcomm €242m (£192m) over its decade-old price war with now-defunct fabless semiconductor company Icera.
In a ruling published on Thursday, the EC said the chipmaker abused its market dominance to sell its UMTS baseband chipsets below cost price between 2009 and 2011 in a bid to prevent the start-up British phone software maker Icera from gaining a foothold in the market.
The EC concluded that the firm engaged in "predatory pricing" to flog its chipsets to Chinese firms Huawei and ZTE at a time when Icera was becoming a " viable supplier of UMTS chipsets providing high data rate performance, thus posing a growing threat to Qualcomm's chipset business."
"It prevented Icera from competing in the market, stifled innovation and ultimately reduced choice for consumers," the ruling states.
Commissioner Margrethe Vestager commented: "Baseband chipsets are key components so mobile devices can connect to the Internet. Qualcomm sold these products at a price below cost to key customers with the intention of eliminating a competitor.
"Qualcomm's strategic behaviour prevented competition and innovation in this market and limited the choice available to consumers in a sector with a huge demand and potential for innovative technologies.
"Since this is illegal under EU antitrust rules, we have today fined Qualcomm €242m."
The Commission has also ordered Qualcomm not to engage in such practices or practices with an equivalent object or effect in the future.
In a statement, Qualcomm said is plans to appeal: "The Commission spent years investigating sales to two customers, each of whom said that they favoured Qualcomm chips not because of price but because rival chipsets were technologically inferior.
"This decision is unsupported by the law, economic principles or market facts, and we look forward to a reversal on appeal.
"The Commission's decision is based on a novel theory of alleged below-cost pricing over a very short time period and for a very small volume of chips. Contrary to the Commission's findings, Qualcomm's alleged conduct did not cause anticompetitive harm to Icera, the company that filed the complaint."
Last year, the watchdog fined Qualcomm $1.1bn over its exclusive deal with iPhone maker Apple to use only Qualcomm's chips in its devices. The regulator said that the tactic was intended to prevent rival companies from becoming part of the iPhone modem supply chain.
In recent years, Qualcomm has also faced separate fines in South Korea and Taiwan. In the US, the company lost a legal battle in May, which was brought by the Federal Trade Commission.
In his ruling, the US District Court Judge Lucy Koh said that the company had violated antitrust rules by using its monopoly power to bully companies into overpaying for its patent licences. The court also ordered Qualcomm to renegotiate its business deals and to license patented technology to rivals with reasonable terms.
The company was also barred by the court from signing exclusive deals with other smartphone makers, which prevent customers from purchasing modem chips from other firms. µ
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