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Qualcomm will not have to pay a $1 Billion Punishment to the European Union for its LTE Arrangement With Apple

The European Commission’s probe was judged to have procedural flaws, according to the court.

Qualcomm (PDF) has won a case in which the European Union’s second highest court overturned a 2018 European Commission order to punish the corporation €997 million ($1.05 billion). Qualcomm allegedly exploited its market dominance in LTE baseband chipsets by paying Apple billions of dollars to use its chips exclusively in iPhones and iPads from 2011 to 2016. Competitors, like as Intel, are said to have been blocked from signing deals with Apple as a result of this. The General Court has now declared the Commission’s ruling null and void “in its entirety.”

The General Court stated in its announcement that it made its conclusion based on two factors. The first is that it discovered “a series of procedural flaws” that threatened Qualcomm’s right to defend itself. The Commission appears to have neglected to document the exact content of meetings and conference calls with third parties in connection with the matter, as required. Furthermore, it predicated its ruling solely on Qualcomm’s alleged abuse of market dominance for LTE chipsets, despite the fact that the case’s statement of objections also cited Qualcomm’s abuse of position for UMTS chipsets.

While Qualcomm’s payments lowered Apple’s incentives to adopt other businesses’ products, the General Court determined that there were no viable alternatives to Qualcomm’s LTE chipsets for iPhones at the time. It also said that there was insufficient evidence to determine if Qualcomm’s payments barred Apple from adopting other companies’ chipsets in its 2014 and 2015 iPad models.

This is the second time the General Court has overturned a sanction levied by the European Commission against giant tech companies. The court also reversed the Commission’s €1.06 billion fine against Intel in January. In a case similar to this one, the Commission accused Intel of abusing its market dominance by offering incentives to companies like HP, Dell, and Lenovo to use its microprocessors instead of those from rival AMD.

However, Qualcomm’s battle may not be done. According to Reuters, the Commission still has the option of filing an appeal with Europe’s highest court. Indeed, it told the outlet that it will carefully consider the court’s decision before deciding on its next course of action.

European regulators have expressed hope that the EU move will inspire comparable change in the United States, and it very well may. Although there is a lot of enthusiasm behind bipartisan antitrust enforcement proposals in Congress right now, the time to get anything done on Capitol Hill is swiftly running out. The FTC, on the other hand, is attempting to use its power to stop damaging mergers and anti-competitive practices that restrict competition, suppress wages, or harm consumers, particularly in the area of privacy.

But, like with Qualcomm, enforcement against hardware companies is a different issue, going more slowly and with less certainty. The EU General Court overturned a 2009 judgement fining Intel €1 billion for abusing its market position in computer processors in January.

In 2010, the FTC settled a similar allegation with Intel, although no fines were imposed as part of the deal. Broadcom, a chipmaker, also struck a settlement with the FTC in November on allegations that it had unlawfully abused its dominating market position. That agreement did not include a monetary penalty.

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