Finding irregularities in the rights of the defence and overturning the European Commission’s competition analysis, the General Court of the European Union annulled in its entirety the January 2018 decision that fined US manufacturer Qualcomm approximately €1 billion for abuse of a dominant position between February 2011 and September 2016 on the market for semiconductors supplying integrated circuits (baseband chipsets) for mobile devices using the LTE standard (see EUROPE 11946/9), in a judgment delivered on Wednesday 15 June (Case T-235/18).
In its judgment, the General Court found a number of irregularities committed by the Commission in compiling the case file. The Commission did not fully comply with the obligation to record meetings and telephone conferences with third parties for the purpose of collecting information for the investigation.
Furthermore, the General Court noted that the contested decision was limited to finding an abuse of a dominant position only in the market for LTE chipsets, whereas the statement of objections referred to an abuse both in that market and in the market for UMTS chipsets, another cellular communication standard. Such an alteration of the objections affected the relevance of the data forming the basis of Qualcomm’s economic analysis aiming to argue that its conduct was not capable of having foreclosure effects. The Commission should therefore have allowed the US company to be heard and, where appropriate, to adapt its analysis. Consequently, the General Court finds that the Commission violated Qualcomm’s rights of defence.
The Commission considered that the agreements, which provided for incentive payments that required Apple to source its LTE chipsets exclusively from Qualcomm, could have anti-competitive effects.
On this issue, the General Court considered that the Commission failed to take into account all the relevant factual circumstances. Notably, while the Commission found that the incentive payments had reduced Apple’s incentives to switch to competing suppliers, the EU institution’s decision also found that Apple had no technical alternative to Qualcomm’s LTE chipsets for the bulk of its needs during the relevant period, i.e. for its iPhones.
Similarly, the General Court found that the conclusion that the payments in question had actually reduced Apple’s incentives to turn to competitors for the LTE chipsets integrated into certain iPad models to be launched in 2014 and 2015 was not sufficient to establish that they were anti-competitive for Apple’s overall needs.
See the General Court’s judgment: https://aeur.eu/f/24g (Original version in French by Mathieu Bion)