Qualcomm Suffers Court Setback in EU Antitrust Case

“Qualcomm” by Karlis Dambrans. Licensed under CC BY 2.0.

The Court of Justice of the European Union (CJEU) last week ruled against Qualcomm in an antitrust case over UMTS-compliant baseband chipsets.

The case dates back to April 2010, when UK company Icera Inc. filed a complaint accusing Qualcomm of predatory pricing by supplying three chipsets to its customers Huawei and ZTE at below cost price.

In 2015, the European Commission formally opened an investigation into whether Qualcomm had abused its dominant position under Article 102 of the Treaty on the Functioning of the European Union (TFEU).

In January 2017, the Commission sent a letter to Qualcomm requesting further information. This was followed by a formal decision on March 31, 2017.

In July 2019, following its investigation, the Commission found that Qualcomm had abused its dominant position from mid-2009 to mid-2011, and that this had a significant detrimental impact on competition. (In May 2011, Icera was acquired by Nvidia, which wound down the company’s baseband chipset business line in 2015.)

The Commission fined Qualcomm €242 million ($300 million) which represented 1.27% of the company’s turnover in 2018, and ordered it not to engage in such practices in the future.

Qualcomm Challenges Commission Decision

The CJEU judgment relates to the March 31, 2017 Commission decision. Qualcomm challenged the decision on six grounds. Its objections included the excessive duration of the procedure, failure to state reasons, proportionality, that the information requested was unnecessary, and that it went beyond the scope of the investigation.

In a decision on April 9, 2019, the EU General Court dismissed Qualcomm’s action. The company appealed this decision to the CJEU.

In its January 28  judgment, the CJEU dismissed Qualcomm’s appeal and upheld the decision. It said case law has established that the Commission is entitled to require the disclosure only of information which may enable it to investigate presumed infringements which justify the conduct of the investigation. It added:

Having regard to the broad powers of investigation conferred on the Commission by Regulation No 1/2003, it is for the Commission to decide whether a particular item of information is necessary to enable it to bring to light an infringement of the competition rules. Even if it already has evidence, or indeed proof, of the existence of an infringement, the Commission may legitimately take the view that it is necessary to request further information enabling it better to define the scope of the infringement, determine its duration or identify the circle of undertakings involved.

The judgment gives the Commission the green light to seek a broad range of information in antitrust investigations, which may have implications for actions against other tech companies.

This case is one of three antitrust cases involving Qualcomm in Europe. In 2018 the company was fined €997 million for making payments to Apple on condition it would not buy chipsets from rivals. An investigation into 5G chipsets was launched in December 2019 and is ongoing.