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Qualcomm fined US$1.2 billion for bribing Apple to use its own LTE chips

By Cookie Monster - on 25 Jan 2018, 12:00am

Qualcomm fined US$1.2 billion for bribing Apple to use its own LTE chips

EU antitrust regulators fined Qualcomm US$1.2 billion over the latter's exclusive deal with Apple to not use rivals' LTE chips. 

In a statement to Reuters, the European Commission said that Qualcomm paid billions of dollars to Apple so that it would not use LTE chips from rival companies for the iPhone and iPad. This effectively blocked rival companies such as Intel from competing in the market.

“Qualcomm paid billions of U.S. dollars to a key customer, Apple, so that it would not buy from rivals. These payments were not just reductions in price – they were made on the condition that Apple would exclusively use Qualcomm’s baseband chipsets in all its iPhones and iPads,” European Competition Commissioner Margrethe Vestager said in a statement.

The fine would be a substantial blow to Qualcomm as it represents 4.9% of the company's 2017 turnover. Qualcomm responded that it would appeal the Commission's decision immediately.

“We have a strong case for judicial review and we will immediately commence that process,” the group’s general counsel Don Rosenberg said in a statement, adding the company believed its agreement with Apple did not violate EU rules.

There would be no repercussions for Apple in this case according to the European Commission. It is also noteworthy to mention that the EU's ruling is independent from the ongoing legal battle between Apple and Qualcomm.

Apple has been working hard since 2016 to reduce its reliance on Qualcomm. It used Intel modems for some iPhone 7 models, and is said to be dropping Qualcomm entirely from the iPhone and iPad this year.

Source: Reuters 

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