Qualcomm: EU Antitrust Fine Slightly Reduced but Largely Upheld

The European Court of Justice, based in Luxembourg, has mostly upheld the EU antitrust penalty against Qualcomm, reducing it only from 242 million euros to 238.7 million euros (265.58 million dollars). The court justified its decision by stating that the American technology giant had engaged in market-distorting practices through abuse of its dominant position between 2009 and 2011. The basis for this decision was a complaint by the British company Icera, accusing Qualcomm of "predatory pricing" to eliminate competition. The European Commission concluded that Qualcomm had sold certain quantities of its UMTS chipsets to its main customers Huawei and ZTE below production cost during the period in question, to drive Icera, its then-largest competitor, out of the market. Interestingly, Icera was acquired by the American company NVIDIA in May 2011, further fueling consolidation activities in the chipset market. Although Qualcomm sought to contest the penalty, citing procedural errors and irregularities in the Commission's assessments, most of these objections were dismissed by the court. Additionally, the court found that the Commission had unlawfully deviated from the methods set out in its 2006 guidelines when calculating the penalty amount. For this reason and within its unlimited jurisdiction, the court reduced the fine to 238.73 million euros. Qualcomm shares recently saw an increase of 0.21% and were trading at 169.05 dollars in pre-market trading on Wednesday.