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EU fines chipmaker Qualcomm for ‘predatory pricing’

Accused of selling 3G baseband chipsets below cost to force startup Icera out of the market.


BRUSSELS — The European Union on July 18 fined US chipmaker Qualcomm $271 million, accusing it of “predatory pricing” to drive a competitor out of the market.

EU Antitrust Commissioner Margrethe Vestager said the US company was abusing its market dominance in 3G baseband chipsets and sold below cost to force startup Icera out of the market. Icera was seen as a rival that could eventually threaten Qualcomm’s dominance, Vestager said.

Vestager said the market was too important to tolerate such abuse.

“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,” she said.

The fine of 242 million euros represents 1.27% of Qualcomm’s 2018 revenue. The EU had already fined Qualcomm $1.23 billion after concluding it bribed Apple to stifle competition.

Qualcomm said it plans to appeal Thursday’s fine to an EU court and denied the charges.

“This decision is unsupported by the law, economic principles or market facts, and we look forward to a reversal on appeal,” Don Rosenberg, general counsel of Qualcomm, said in a statement.

“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,” Rosenberg said.

Qualcomm has been the focus of an antitrust case in the U.S. as well, with media reports this week saying that the government asked a court to pause enforcement of an antitrust ruling.

 

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