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Euro watchdogs 'abandon $1b fine' against Qualcomm

Snapdragon giant was accused of bribing Apple not to use rival modems

The European Commission has reportedly called it quits in its bid to fine Qualcomm for alleged anti-competitive payments to Apple.

Reuters reports antitrust regulators have signaled they will not appeal a June court ruling nixing a nearly $1 billion fine against the US system-on-chip designer, which was accused of breaking Europe's competition laws.

According to "people familiar with the matter," it appears regulators have determined it would be too difficult to convince Europe’s top court to overturn the earlier decision to cancel the fine.

The European Commission declined The Register's request for comment. However, the deadline to appeal the court’s ruling has not yet expired.

In June, a EU General Court ruled against a $1.04 billion (€997 million) antitrust fine leveled against Qualcomm, asserting Europe's watchdogs had made “a number of procedural irregularities [which] affected Qualcomm's rights of defense and invalidate the commission's analysis" of the Snapdragon giant's business dealings.

Regulators targeted Qualcomm in early 2018, alleging that the American corp had made a series of payments to Apple between 2011 and 2016 to ensure the exclusive use of Qualcomm cellular modems in Apple's iPhone and iPad products. These claims were backed up by internal documents that showed Qualcomm believed the payments would prevent Apple from switching to rival modems, including those made by Intel at the time.

However, in a ruling handed down by the EU General Court late this spring, it determined that regulators had infringed on Qualcomm’s rights of defense. The court also found that the payments made by Qualcomm to Apple were insufficient to determine whether they were anti-competitive.

“The commission did not provide an analysis which makes it possible to support the findings that the payments concerned had actually reduced Apple's incentives to switch to Qualcomm's competitors,” the decision read.

In fact, Apple end up deploying Intel modems in several of its products beginning with the release of the iPhone 7 in late 2016. In 2019, Apple acquired Intel’s modem business in a deal valued at $1 billion. Despite the acquisition, Apple continues to rely on Qualcomm as its primary source of modems.

The decision marks the European Commission's latest defeat. In January the EU’s top court overturned a $1.2 billion fine leveled against Intel for similar alleged behavior. In that case, regulators accused the x86 titan of making payments to German electronics retailer Media Saturn Holding not to sell computers using competitors' components.

EU regulators now face paying Intel $623.5 million (€593 million) in damages. In June, the chipmaker filed a complaint with the EU General Court seeking “payment of compensation and consequential interest for the damage sustained because of the European Commission's refusal to pay Intel default interest."

The commission’s string of bad luck may not be over, either. Early next month, the EU General Court is expected to rule on Google’s challenge to a €4.34 billion fine for using its Android operating system to push out competitors. ®

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