Four years ago, the European Commission fined Qualcomm 997 million euros for abuse of a dominant position in the 4G chip market. It has just been annulled by the Court of Justice of the European Union.
So far, Qualcomm is doing well. The American group, mainly renowned for its mobile chips (Snapdragon), has seen its fine of 997 million euros, imposed four years ago by the European Commission for abuse of a dominant position on the market for 4G chips, canceled by the Court of Justice of the European Union (CJEU). The court highlighted several irregularities to justify its decision. For Brussels, everything has to be redone.
In its investigation, the European Commission focused on events that occurred between February 2011 and September 2016. At the end of the investigation, the European executive estimated that Qualcomm had agreed with Apple by paying several billion dollars to the Cupertino company so that it does not see the competition as part of its supply of 4G chips to equip its iPhone and iPad. A situation that would have harmed players like Intel.
The Commission’s investigation criticized on the substance and on the form
However, the CJEU considers that Qualcomm’s rights of defense were not respected during the procedure, in particular because the European Commission did not record the content of all the interviews carried out to collect information in the framework of the investigation. Moreover, the CJEU indicates that the abuse of a dominant position has been poorly characterized. “The court observes that the contested decision is limited to upholding an abuse of a dominant position on the sole market for LTE chipsets, whereas the statement of objections targeted an abuse both on this market and on that of UMTS (Universal Mobile Telecommunications System) chipsets. “writes the CJEU.
Another important element, “it appears from the Commission’s decision that Apple did not have a technical alternative to Qualcomm’s LTE chipsets for the majority of its needs during the relevant period, namely those corresponding, in essence, to iPhones”. Thus, European justice “concludes that the Commission’s analysis has not been made in the light of all the relevant factual circumstances and that it is therefore vitiated by illegality”.
Because of these irregularities in substance and form, “the court finds that the finding that the payments at issue actually reduced Apple’s incentives to look to Qualcomm’s competitors to source LTE chipsets for its needs for certain iPad models to be launched in 2014 and 2015 is not enough to establish their anti-competitive nature for all of Apple’s needs”. To sanction the American semiconductor giant, Brussels will therefore have to review its copy. The European Commission has two months and ten days to appeal the CJEU’s decision.