Qualcomm will plea for the USD 271M fine by European Union

European Union recently declared USD 271M fine to US Chipmaker Qualcomm after 10 years of investigation. The company is said to be guilty of abusing the pricing of baseband chips with the purpose of eliminating its competitor Nvidia (previously known as Icera).

Photo from: Engadget

Qualcomm will plea for the USD 271M fine by European Union

EU Commissioner Margrethe Vestager explained: "Baseband chipsets are key components so mobile devices can connect to the Internet. Qualcomm sold these products at a price below cost to key customers with the intention of eliminating a competitor. Qualcomm’s strategic behavior prevented competition and innovation in this market and limited the choice available to consumers in a sector with a huge demand and potential for innovative technologies. Since this is illegal under EU antitrust rules, we have today fined Qualcomm EUR 242M." 

This issue clearly did not stem at cheaper pricing but it came from the fact that Qualcomm priced the chipsets below the production cost, which in turn made both Huawei and ZTE choose them. EU further stated the impact of Qualcomm's approach in squeezing out Icera means lesser options for the consumers. Aside from the penalty, the American company was ordered to avoid involvement in identical practices from now on.

On the other hand, a general counsel from Qualcomm named Don Rosenberg responded to this decision by claiming EU's novelty theory is inconsistent and unsupported by any prior example. He added that they are anticipating to reverse the decision since this is unsupported by the law, economic principles or market facts. 

Apart from that claims, Qualcomm emphasized that Huawei and ZTE adapted their technology because of its superiority to the Icera. 

What are your thoughts on this issue?

Source: Tech Arena, Tech Radar