EU fines Qualcomm $272 million for selling chips below cost and driving rival out of the market

EU fines Qualcomm $272 million for selling chips below cost and driving rival out of the market
The European Commission has ruled out that Qualcomm sold 3G chips at predatory prices between 2009 and 2011 in an attempt to drive competing supplier Icera out of the market and has slapped a $272 million anti-trust fine.

The ruling is in regard to 3G chips that Qualcomm sold for mobile Internet dongles at the time, and with this latest fine also concludes a four-year EU investigation into Qualcomm.


Just as Icera was emerging as a proper rival, Qualcomm sold its 3G chips below cost to Huawei and ZTE, a move that the European Commission has concluded to be "targeted" and which "allowed [Qualcomm] to maximise the negative impact on Icera’s business."

If you think you are reading the name Qualcomm in litigation news way too often, you are not just imagining. The chip maker was in the midst of some big cases recently, including a war with Apple over chip licensing, a ruling by a US judge that accused Qualcomm of charging "unreasonably high" royalties for its patents, plus additional lawsuits in China, Korea and Taiwan.

Today's fine will have a small impact on Qualcomm as it stands currently. The $272 million fine makes up just 1.27% of the company's revenue for last year, and the European Commission is imposing the fine over a practice that it considers the chip maker ended in 2011. It serves more as a warning that such anti-competitive behavior would be noticed in the future.

As for the competitor in question, Icera, the fine comes a few years too late to help the company. Icera was acquired by Nvidia in 2011, with hopes of an integrated Icera modem built inside Nvidia chip, a dream that never materialized and Nvidia quit the modem market in 2015.

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7 Comments

1. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

Can we get clarification on this? How did they violate the law? in the article it seems like QA decided to sell its chip cheaper. So, what is the issue with that? I dont understand is not the whole market thing base on competition? If I make a widget and my rival makes a widget and we are both trying to sell them and I decide to sell cheaper than my rival why would that be against the law? Is it a European thing where we all have to sell for the same price?

2. PartTimePhoner

Posts: 5; Member since: Jun 03, 2019

No, well, the thing is if there is no competition there is no innovation and this, consumers right on having options and innovation, is being violated. Or at least thats what they are tryna say

3. iloveapps

Posts: 855; Member since: Mar 21, 2019

The issue is that they sell chip that cost more to apple than competitors. Greedy company should be punish. Those who do not update their phones for at least 5 years, do not have quality phones that breaks easily, those with exploding batteries, app crashing, overclocking performance when using specs benches and those who sell 2 days old phone that breaks easily costs $$$$. Lastly, those who copied apple’s.

4. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

Of course one can sell cheaper, but there’s a problem when the price is always smaller than the cost.

5. oldskool50

Posts: 1323; Member since: Mar 29, 2019

Why should it be. What law says I can't sell it for the price I want, no matter how high or low? So what if I sell it at the lower cost than it was to make. I made it. So I have a right to sell it for whatever. The EU is stupid. Europeans should never ever try to talk bad about US citizens...EVER! I made the product. I have a right to sell it at whatever pricr I choose. Basiclaly it sounds like if Qualcomm gave them away free, they would say that's against the law too. After all free is a cheaper price right? What you said made zero sense. Do you live in Europe? Because what the EU is saying is stupid and I wouldn't pay one dime. I guess i won't be selling anything in Europe.

6. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

That is what I am understanding it as. If I make a product that people want and someone else does the same product and I don't conspire with them to set price but directly compete by offering it 2 cent cheaper than them why should I be punished? Let say it does not work people like my competitor more and buy his/her product over my and because I was selling for less, I took a lost. is the lost not punishment enough? Why is the government stepping in and saying " despite you taking a lost we are still going to fine you for selling cheaper" Is that not adding insult to injury?

7. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

The rules of business are different than what you say. What's the purpose of a for profit company? If it's welfare, it should change into a NGO and do welfare, but an Inc (llc and others) needs to make a profit. A company that constantly sales under the production price affects the competition (other companies want to compete honestly, but they are driven out of business by an unfair player) and EC is all about making sure we have competition inside EU. US citizens were never a topic for the Europeans, the stupid things they do is. I'm not sure you can, unless you pay someone way smarter than you to make sure you follow the EU Regulations.

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