Qualcomm was fined 997 million euros by the European Union to pay for Apple’s dedicated chip

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US chip maker Qualcomm fined 997 million euros ($ 872.7 million) by the EU antitrust regulators to cover Apple’s use of its chips on the iPhone, locking in rivals such as Intel.

The European Commission launched a survey in July 2015 that covered the period from 2011 to 2016 with Qualcomm’s dominance in the market, the modems and chips needed to connect mobile phones to 4G mobile phone networks . It issued a fee schedule after five months.

Margrethe Vestager, European Competition Commissioner, said: “QUALCOMM has consolidated its market leadership by illegally shutting down competitors in the LTE baseband chip market for more than five years.
“Qualcomm paid billions of dollars to an important client, Apple, so that it would not buy it from its competitors, not only because of the price cuts, but because Apple will be on all iPhones and iPads Exclusive use of Qualcomm baseband chipsets. ”

The fine, which accounted for 4.9% of Qualcomm’s 2017 turnover, said it said it is less than half of the company’s £ 1.58 billion maximum possible fine of 10% of annual revenue.

The company said it will seek judicial review. Don Rosenberg, Qualcomm’s executive vice president and general counsel, said: “We are confident that this agreement does not violate EU competition rules and will not adversely affect market competition or European consumers.

“We have a strong case for judicial review and we will start the process immediately.”

Unlike the European Union’s investigation, Apple and Qualcomm are conducting extensive legal controversy around the commercial practices of the latter. In January 2017, Apple filed a lawsuit against Qualcomm for $ 1 billion, claiming the company had overcharged chips and failed to pay a one-billion-dollar royalty refund.

Qualcomm alleged that Apple had infringed on a number of patents related to extending the battery life of smartphones and sued Apple for violating software licenses in November against Intel. Subsequently, Apple accused Qualcomm of patents related to battery life infringed the patent.

Chipmakers are also using components in millions of Android devices, including Samsung, and are facing investigations in several countries. The U.S. Federal Trade Commission is also investigating Qualcomm’s deal with Apple, while South Korea is investigating deals with Samsung.

The EU is expected to handle cases involving Icera, a British phone software maker that has been acquired by chip maker Nvidia in the coming months. Qualcomm was accused of selling chips at below-cost prices to get rid of Icera.

EU fines could also make Qualcomm more vulnerable to a $ 103 billion hostile takeover by chip maker Broadcom. Broadcom believes that this will maintain a stable relationship with customers such as Apple.

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