The European Commission imposed a fine of €242 million on the US company Qualcomm on Thursday 18 July for abuse of a dominant position on the 3G baseband chipsets market, as the company applied predatory pricing from 2009 to 2011.
"Our investigation found that Qualcomm blocked competition by applying predatory prices to protect its dominance", said Margrethe Vestager, Commissioner for Competition Policy, at a press conference. "EU competition rules do not prevent dominant companies from offering low prices to their customers. […]. They can sell at low prices but they cannot sell below cost with the intention of eliminating competitors", she added.
This decision follows Statements of Objections sent to the US company (see EUROPE 11448/5) following the opening of a formal investigation (see EUROPE 11361/3).
Baseband chipsets allow smartphones and tablets to connect to cellular networks.
According to the Commission's investigation, Qualcomm abused its dominant position between mid-2009 and mid-2011 by applying predatory pricing. It sold specific quantities of some of its chipsets below cost to Huawei and ZTE, two particularly important customers, with the aim of eliminating Icera, its main competitor at the time, from the market. The latter company was becoming an increasing threat to Qualcomm with regard to chipsets.
The Commission considered the price-cost test of the chipsets evaluated and several qualitative elements indicating the anti-competitive logic of Qualcomm's behaviour in reaching its conclusion. In addition, it found that it had not been proven that the company's practices could be justified in terms of potential efficiencies.
Consequently, it found that Qualcomm's practices had a seriously detrimental impact on competition by preventing Icera, which has since been taken over and put a stop to its chipsets business, from exerting competitive pressure, hindering innovation and reducing consumers' opportunities for choice.
In view of these considerations, the Commission has decided to impose a fine of €242,042 million on Qualcomm.
Response. The company quickly reacted to this decision and expressed its disagreement with it.
"The Commission spent years investigating sales to two customers, each of whom said that they favored Qualcomm chipsets not because of price but because rival chipsets were technologically inferior", said Don Roseberg, the company's executive vice president. "This decision is unsupported by the law, economic principles or market facts, and we look forward to a reversal on appeal", he added. (Original version in French by Lucas Tripoteau)