Qualcomm fined 242 million euros for selling 3G chipsets too cheaply

Qualcomm has been fined millions by the European Commission for abusing its market power. The US chipmaker sold its 3G chipsets below cost to eliminate competition, according to EU research.

The competition fine amounts to a total of 242,042,000 euros, or 1.27 percent of Qualcomm’s turnover in 2018. After an investigation, the European Commission concludes that Qualcomm was guilty of predatory pricing between mid-2009 and mid-2011. offering 3G chipsets below cost to knock out the competition.

In that period, Qualcomm had a dominant position in the market for umts chipsets, the European Commission further notes. The manufacturer had a market share of sixty percent, which was almost three times that of its biggest competitor: Icera. The significant R&D investment required to design umts chipsets and Qualcomm’s patents pose significant barriers to entering the 3G chipset market, further solidifying Qualcomm’s position. However, when Icera threatened to become a bigger competitor, Qualcomm proceeded to supply three of its UMTS chipsets below cost to Huawei and ZTE.

The European Commission has determined the amount of the fine based on the value of the direct and indirect sales of umts chipsets in Europe, and the duration and seriousness of the violation of European competition rules. Qualcomm’s behavior has disadvantaged competition and innovation in the market and limited consumer choice, said Margrethe Vestager, Commissioner responsible for competition in the EU.

Qualcomm has come under frequent fire in recent years for abusing its dominant position. In the United States, China, South Korea and Taiwan, among others, the company was fined for its obstructive practices, including by abusing its patents. In Europe, the company was fined EUR 997 million last year for violating competition rules with its LTE chips. Qualcomm paid Apple billions to be the supplier of modems for the iPhone and iPad, according to the EU.