Qualcomm Loses EU Case, Slapped with Daily Fine of $6,65,000
Qualcomm Inc. QCOM, the largest manufacturer of wireless chipsets based on baseband technology, has been fined with 580,000 euros ($665,000) per day after losing a court bid against European Union (EU).
Earlier, Qualcomm had appealed to the Luxembourg-based General Court to suspend a case filed against it by the telecom regulatory body of the EU, the European Commission (EC). EC accused Qualcomm of using anti-competitive methods to throw out British phone software maker Icera. The company failed to provide EU antitrust regulators with information and has lost the appeal against the penalty in an EU court on Jul 1.
EU General Court President, Marc Jaeger, clearly stated that it is mandatory for Qualcomm to answer the regulator's questions during the proceedings. The company was given a Jun 30 deadline to respond to unanswered questions. If the company continues with the uncooperative and uncoordinated attitude, then it may encounter a series of penalties with several millions of euros as fine.
The risk of new fines adds to Qualcomm’s ongoing regulatory proceedings. The company continues to receive charges due to unfair business practices and licensing royalty payments. Last month, it settled a licensing dispute with BlackBerry Limited BBRY by paying $940 million on May 31. Meanwhile, the ongoing $1-billion lawsuit dispute (since Jan, 2017) with tech giant Apple Inc. AAPL is getting uglier with each day, which is affecting the company’s margins. To this end, Qualcomm recently filed a complaint with the United States International Trade Commission (ITC) against Apple for infringing six of its patents covering various aspects of mobile phone technology. Qualcomm has requested ITC to investigate Apple's infringing imports and issue a Limited Exclusion Order (LEO) to ban importation of iPhones and other products linked with the patent in the U.S.
Moreover, Qualcomm’s proposed deal to acquire Netherlands-based mobile chipset giant NXP Semiconductors is on hold as of now. The deal is under a thorough investigation by the EC, which will probe to check whether the deal could lead to higher prices, exclusion of rival chipset suppliers and reduced innovation in the semiconductor industry.
Qualcomm is under EU’s scrutiny for its numerous dealings. We expect the company to quickly resolve such disputes and focus on its expansion strategies which include its Snapdragon processors known for its Internet of Things (IoT) applications, patent license deals entailing 3G and 4G networks, tie-up with AT&T Inc. T and Ericsson to test 5G New Radio specification and the launch of China’s first end-to-end data call. Moreover, the company is foraying into areas like automotive, networking and mobile computing.