EU Competition Law: EU Commission Fines Qualcomm EUR 997 Million

Sullivan & Cromwell LLP - January 31, 2018

On January 24, 2018, the European Commission (“Commission”) fined Qualcomm EUR 997 million (approximately USD 1.2 billion) for abusing its dominant position under Article 102 TFEU in the market for LTE (4G) broadband chipsets. Closing a three-year investigation, the Commission found that Qualcomm had made significant payments to secure exclusivity from a key customer, Apple.

This is the first time that the Commission has imposed a fine on Qualcomm, almost a decade after closing a four-year investigation into Qualcomm’s 3G licensing practices. The fine, which amounts to 4.9% of Qualcomm’s 2017 worldwide turnover, ranks among the highest imposed by the Commission to date under Article 102 TFEU. It comes close to the EUR 1.06 billion fine imposed in 2009 on Intel for issuing rebates and payments designed to secure customer exclusivity.

The decision was issued only six days after the Commission cleared Qualcomm’s USD 47 billion acquisition of NXP Semiconductors subject to various licensing, interoperability, and standard-essential patent transfer commitments in the near-field communication sector. Qualcomm is still subject to a seemingly more complex abuse-of-dominance investigation by the Commission involving predatory pricing practices in the market for UMTS (3G) baseband chipsets.

Qualcomm announced its intention to appeal the Commission’s decision before the EU Courts.