Qualcomm hit with $1.2 billion fine by the EU for paying Apple to use its chips
Things aren't looking good for Qualcomm. The European Commission has levied a €997 million ($1.23 billion) fine against Qualcomm for "abusing its market dominance in LTE baseband chipsets." The regulator found that Qualcomm violated EU antitrust laws by making "significant payments to Apple" on the condition that it would exclusively use Qualcomm chipsets in iPhones and iPads.
By doing so, the EU regulator alleged that Qualcomm shut out its rivals from competing effectively, enabling the chip vendor to solidify its position as the market leader. From the EU ruling:
The deal was originally signed in 2011, and was extended until 2016 a few years later. Apple started exploring other options following the end of the agreement, resulting in the use of Intel LTE modems in the iPhone 7 and 7 Plus.
The $1.2 billion fine by itself won't hurt Qualcomm's bottom line significantly as it represents 4.9% of the company's overall revenue in 2017, but it is one of many regulatory battles Qualcomm is facing right now. The company is embroiled in a bitter patent fight with Apple, and is simultaneously fending off a $100 billion takeover bid by Broadcom.
For its part, Qualcomm has stated that it will appeal the EU commission's ruling. From Don Rosenberg, executive vice president and general counsel of Qualcomm:
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