The European Union is considering how to respond to a major blow to its antitrust enforcement after a court in Luxembourg sided with chipmaker Qualcomm -- which had been appealing a €997 million ($1 billion+) fine the EU levied against it back in 2018.
At the time, the bloc's competition regulator concluded Qualcomm had abused its market position by providing financial incentives to iPhone maker Apple to exclusively use its chips in iPhones and iPads, between 2011 and 2016. However, per the AP, the EU General Court found a number of procedural irregularities in the case and rejected the Commission's analysis of the conduct it had alleged against the chipmaker.
“While the Commission concluded that the incentive payments had reduced Apple’s incentives to switch to competing suppliers to source LTE chipsets, it is apparent from the Commission decision that Apple had had no technical alternative to Qualcomm’s LTE chipsets for the majority of its requirements," the news agency reports the court setting out its reasoning for siding with Qualcomm.
Asked for its response to the ruling, a spokeswomen for the EU's executive told us: "The European Commission takes note of today's judgement by the General Court that annulled the Commission’s 2018 Decision which found that Qualcomm had abused its dominant position.
"The Commission will carefully study the judgement and its implications and will reflect on possible next steps."
Qualcomm was also contacted for comment.
Update: A Qualcomm spokesperson said: “We are pleased with the General Court’s decision.”
The Commission hit the chipmaker with another, smaller antitrust fine back in 2019 -- in a separate enforcement related to what it assessed as abusive pricing of baseband chips -- which Qualcomm also chose to appeal (a verdict on that appeal remains pending).
Today's ruling is not the first time the EU's antitrust enforcement against tech firms has faced being unpicked in court: Just under two years ago the EU's General Court also found against a Commission decision to fine Apple $15 billion for what it had claimed were illegal tax benefits in Ireland, dating back as far as 2003. (Although the EU's executive went on to appeal in the hopes of overturning Apple's successful appeal.)
While, back in January, the EU also had a $1.2 billion antitrust fine against Intel overturned by the General Court -- in a case related to practices by the chipmaker that date back as much as two decades (the penalty itself was handed down in 2009).
However the EU has (so far) had better luck making its antitrust enforcement stick against Google: Back in November 2021 the General Court largely dismissed Google's appeal against the €2.42 billion penalty the Commission handed down in 2017, in relation to anti-competitive practices linked to its product comparison search service, Google Shopping.
A number of other Commission antitrust decisions against Google are still pending appeals decisions. Such as the record-breaking $5 billion penalty the EU hit the company with in 2018 for violations linked to how it operates its Android mobile platform.
Commenting on the immediate implications of the EU's decision in the Qualcomm case being overturned on first appeal, Geoff Blaber, CEO, at analyst firm CCS Insight, told us: "This is a major decision in favour of Qualcomm that aligns with that of the Federal Trade Commission case in the U.S. Whilst it may not mark the end of the EU’s case, it’s clear that the verdict was based on fundamental errors in procedure and an inaccurate framing of the market Qualcomm was alleged to be dominating."
This report was updated with additional comment