The European Commission has fined chipmaker Qualcomm (opens in new tab) £870m for abusing its market dominance in LTE baseband chipsets to prevent rivals from competing in the market.
According to EU Competition Commissioner Margrethe Vestager, the company paid Apple to exclusively use its LTE chips (opens in new tab) in its iPhones and iPads which prevented any of its rivals from challenging Qualcomm in the space.
Vestager offered a thorough explanation of just how Qualcomm had used its market dominance to shut out its rivals in a statement, saying:
"Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance. Qualcomm paid billions of US Dollars to a key customer, Apple, so that it would not buy from rivals. These payments were not just reductions in price – they were made on the condition that Apple would exclusively use Qualcomm's baseband chipsets in all its iPhones and iPads.
“This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were. Qualcomm's behaviour denied consumers and other companies more choice and innovation – and this in a sector with a huge demand and potential for innovative technologies. This is illegal under EU antitrust rules and why we have taken today's decision."
Qualcomm has responded to the ruling and the company strongly disagrees with the Commission's decision and will be appealing the fine.
If the appeal is unsuccessful though, it could have implications for the ongoing legal battle (opens in new tab) between the chipmaker and Apple.
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