Daily Management Review

Second Fine Over Market Abuse Slapped By EU On Qualcomm


Second Fine Over Market Abuse Slapped By EU On Qualcomm
The San Diego, California, United States based chip making giant Qualcomm was handed over a second antitrust penalty by the European Commission. The largest chip maker of the world was slapped a fine of 242 million euros or $272 million by the European antitrust regulator over a case that dates back a decade and against charges that the company had blocked a rival out of the business market back then.
The company was charged of predatory pricing between 2009 and 2011 by the European Commission, the EU's competition regulator. According to the charges, Qualcomm had manipulated its prices of memory chip to illegally and unethically force the British phone software maker Icera, which is now a subsidiary of Nvidia Corp, out the market.
"Qualcomm's strategic behavior prevented competition and innovation in the market," Competition Commissioner Margrethe Vestager said in a statement.
Vestager later justified the long time that the case had taken to come to a conclusion during a news conference later saying that the company was first accused of predatory pricing in 2015. She also said that the case itself was a complex one because and that the Commission had to depend on evidence that was supposed to be supplied by the accused company itself.
The EU fine on Qualcomm is equivalent to 1.27 per cent of the company’s global revenues in 2018.
The decision of imposing the fine by the Commission would be contested, Qualcomm said, and added that it was "unsupported by the law, economic principles or market facts."
Qualcomm was also fined 997 million euros or $1.1 billion last year by the Commission over the company making payments to the iPhone maker Apple for using only its memory chip exclusively in its products in an attempt to keep rival companies away which included its US rival Intel.
Broadcom, another of the global leaders of the chip industry, is also being investigated by the Commission over allegations of preventing free and fair business opportunities to competing companies. It is possible that in early autumn, the so-called interim measures which are typically warnings to the company to change behavior, could be imposed by the Commission, Vestager said.
The business policies and practices have also drawn close scrutiny from other regulators also. Sweeping antitrust ruling against the company was passed by a judge of the US Federal Trade Commission in May in a law suit of similar nature brought against it.
Vestager, who has been heading the European antitrust body for the last five years now, has come to be known to impose hefty fines, particularly against US tech giants. This attitude of Vestager has been criticized by the US President Donald Trump.
While not ruling out a different role for her, she hoped to remain in the post when a new Commission takes office in November, Vestager said. She is due to leave office on October 31.