Accused of plotting with Apple, Qualcomm escapes a fine of one billion euros

The European Commission condemned Qualcomm in 2018 for abuse of a dominant position. The fine amounts to one billion euros. Four years later, this decision is reversed.

This is a considerable setback for the European Commission. One more in its efforts to reframe the practices of very large digital and tech groups in terms of competition. In a judgment delivered on June 15, 2022, the General Court of the European Union annulled a Brussels decision dating from 2018. This concerned the American equipment manufacturer Qualcomm.

This is the third time in the space of a few years that the Commission has been sent back to the ropes by the General Court. In 2020, European justice canceled the decision forcing Apple to return 13 billion euros to Ireland, for lack of evidence. In 2021, Amazon escaped a fine of 250 million euros, for similar reasons. And in 2022, it’s Qualcomm.

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Errors in the Commission’s analysis

This time, it is a procedural problem that led the jurisdiction of the Old Continent to break the fine of one billion euros against the company specializing in electronic chips. ” Several procedural irregularities affected Qualcomm’s rights of defense “, commented the Court in a press release published today.

The General Court, in its verdict, also rejected the relevance of the analysis carried out by the European Commission to consider Qualcomm’s guilt. On the one hand, the magistrates noted that the angle chosen by the Commission to attack Qualcomm did not correspond to that previously chosen by Brussels to inform the company of the problems identified.

In the present case, the European executive focused solely on an abuse of a dominant position in the market for 4G (LTE — Long Term Evolution) chips, whereas it forwarded to Qualcomm complaints alleging an abuse both in this market than that of 3G chips (UMTS — Universal Mobile Telecommunications System). This played against Qualcomm, ruled the Court.

Qualcomm is an equipment manufacturer that provides solutions in smartphones and tablets, in particular. // Source: Qualcomm

This difference ” affected the relevance of the data on which Qualcomm’s economic analysis was based to defend themselves and challenge the reproaches formulated by the Commission. Brussels, in short, should have seen this gap, heard Qualcomm’s arguments and at the very least adapted and refined its analysis.

To this, the Tribunal adds another observation. In this case, Qualcomm was accused of having had an anti-competitive plan to secure commercial exclusivity from Apple (which has since stood on its own). Clearly, if incentives have reduced Apple’s motivation to go see the competition to source 4G chips, it still had to exist then.

It appears from the Commission’s decision that Apple did not have a technical alternative to Qualcomm’s LTE chipsets for the majority of its needs during the relevant period. expand the Tribunal. Brussels’ analysis is therefore amputated from certain ” applicable factual circumstances that may provide a more complete picture of the situation.

In general, the Court concludes, the Commission did not produce a sufficiently substantiated file to ensure that the payments by Qualcomm were discovered to be such as to divert Apple from competition to obtain 4G chips, in particular for certain classes of device. — in this case, certain iPad models in 2014 and 2015.

Under these conditions, the Commission’s decision against Qualcomm is “ tainted with illegality “. The fine of around one billion euros against him is therefore not necessary. Brussels may have the option of appealing, but that will no longer change the facts. At best justice will clarify certain questions of law.

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