Qualcomm to Appeal EU Fine for Predatory 3G Chipset Pricing

Qualcomm will appeal the $271 million European Commission fine for predatory pricing of its 3G baseband chipsets, it said Thursday. The antitrust investigation found the manufacturer held a dominant position in the global market for the chipsets 2009-11, and it abused its position by selling quantities of three of the chipsets below cost to Huawei and ZTE in an effort to eliminate rival Icera. Icera was becoming a viable supplier of the chipsets, posing a threat to Qualcomm's business. The EC based its decision on a price-cost test for the three Qualcomm chipsets, plus qualitative evidence showing the anticompetitive rationale. The fine considers the duration and seriousness and is 1.27 percent of Qualcomm's 2018 revenue. "This is the second antitrust fine that we've imposed on Qualcomm," said Competition Commissioner Margrethe Vestager. In 2018, the company got a $1.2 million fine because it granted exclusivity payments, she said: In both cases, Qualcomm's objective was to protect its dominant position in baseband chipsets to shut out rivals. Qualcomm slammed the "meritless nature" of the decision, saying the EC spent years "investigating sales to two customers, each of whom said that they favored Qualcomm chipsets not because of price but because rival chipsets were technologically inferior." The decision is based on a "novel theory of alleged below-cost pricing over a very short time period and for a very small volume of chips," it said. "There is no precedent for this theory, which is inconsistent with well developed economic analysis of cost recovery, as well as Commission practice."