Europe fines Qualcomm €242 million over Icera ploy

July 18, 2019 //By Peter Clarke
Europe fines Qualcomm €242 million over Icera ploy
The European Commission has fined US chipmaker Qualcomm €242 million (about $270 million) for using predatory pricing to drive Icera Ltd. out of the market back in 2009 through 2011.

The fine represents 1.27 percent of Qualcomm's revenue in 2018 and is intended to be a deterrent to stop other companies engaging in similar practices, the EC said.

The ruling comes four years after the investigation in Qualcomm was opened on July 16, 2015 and could have been of up to one tenth of Qualcomm's annual sales.

Icera was a UK startup founded in 2002 that developed 3G modems chipsets. The European Commission has ruled that Qualcomm sold i3G modem chips at below cost, with the aim of forcing its competitor Icera out of the market.

In the particular form of 3G modem relevant to the case Qualcomm held a 60 percent market share between 2009 and 2011. The EC reckons that between mid-2009 and mid-2011 Qualcomm sold these UMTS chipsets below cost to Huawei and ZTE with the intention of eliminating Icera.

Icera was bought by Nvidia Corp. in May 2011 for about $367 million and its baseband modem chip business was wound down in 2015.

Competition Commissioner Margrethe Vestager, said: "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 behaviour 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."

Qualcomm has reportedly said it would appeal the decision, saying it was "unsupported by the law, economic principles or market facts."

Broadcom is also said to be under investigation for stifling competition.

Vestager's five-year term as competition commissioner has been characterized by large fines of US technology giants over monopolistic behaviour. Her term ends on October 31, although she as expressed a desire to stay in post under the incoming head of the European Commission.

Related links and articles:

www.qualcomm.com

News articles:

Qualcomm denies European antitrust charges

Qualcomm's sales practices are under scrutiny

Google to appeal Europe's $5 billion fine

Apple owes $14.5 billion back tax, says Europe


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