Qualcomm faces second EU fine as Vestager’s last big-tech target

Qualcomm could be fined 997 million-euro as early as next month.
By AOIFE WHITE
| Updated on Jun 25 2019, 07:14 PM IST
A Qualcomm sign is seen during the China International Import Expo (CIIE), at the National Exhibition and Convention Center in Shanghai, China November 7, 2018.
A Qualcomm sign is seen during the China International Import Expo (CIIE), at the National Exhibition and Convention Center in Shanghai, China November 7, 2018. (REUTERS)

Qualcomm Inc. faces another European Union antitrust fine a year after being ordered to pay 997 million-euro ($1.13 billion) penalty for thwarting rival suppliers to Apple Inc., according to three people familiar with the latest case.

The chip giant may be fined as soon as next month, said the people, who asked not to be named because the process isn't public. That would make it the last U.S. technology firm to get a large antitrust penalty from Competition Commissioner Margrethe Vestager.

Vestager is due to step down later this year after punishing Google with more than $9 billion in fines and ordering Apple to pay more than 14 billion euros in back taxes. She warned in May she was 'definitely not done yet' with big tech as she weighs potential new probes into Amazon.com Inc., Google and Apple.

The EU's current Qualcomm investigation targets 3G chips for internet mobile dongles sold between 2009 and 2011. Regulators allege these were sold below cost in order to push Icera, now owned by Nvidia Corp., out of the market. The EU took the unusual move of sending an extra antitrust complaint to Qualcomm last year to bolster its arguments of a 'price-cost' test it used to show far below cost the prices were.

Qualcomm and the European Commission declined to comment on the fine. The timing of the penalty could slip beyond the EU's August summer break, one of the people said.

Last year Qualcomm was handed the EU's fifth-largest antitrust penalty over payments to Apple that the EU said were an illegal ploy to ensure only its chips were used in iPhones and iPads. Qualcomm is challenging the fine at the EU courts.

Qualcomm, the largest maker of chips for mobile phones, is unique among semiconductor makers in that it gets most of its profit from licensing patents. Makers of handsets pay the company royalties, whether or not they use its chips. That lucrative profit pool has come under attack as governments around the world scrutinized Qualcomm's business practices.

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First Published Date: 25 Jun, 07:14 PM IST
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