Qualcomm bribed Apple, said EU; short says not

Qualcomm bribed Apple, said EU;  short says not

Chipmaker Qualcomm bribed Apple to the tune of billions of dollars, according to a European Union antitrust finding back in 2018. But a European court has now ruled that the case was not proven, and has overturned the billion-dollar fine imposed at the time.

The fact that Qualcomm paid billions of dollars to Apple is not in dispute; the issue is whether these payments influenced the iPhone maker’s choice of chip company …

EU found that Qualcomm bribed Apple

Qualcomm paid Apple several billion dollars between 2011 and 2016, in return for the Cupertino company buying its LTE modem chips instead of those offered by rival Intel.

The EU opened an investigation into whether this was anticompetitive behavior by Qualcomm, and in 2018 found that it was. The chipmaker was said to have harmed competing LTE chipmakers like Intel.

At the time, the case seemed open-and-shut. There was no denying that Qualcomm made the payments, and it is also a matter of record that Apple bought its LTE chips from the US chipmaker during the period in question. The EU fined Qualcomm €997M, or a little over a billion dollars.

Despite the evidence, Qualcomm appealed the ruling to the General Court, the second-highest court in Europe.

Court says the EU failed to prove its case

Reuters reports that a court has today sided with Qualcomm, and overturned the fine.

Qualcomm on Wednesday won its fight against a 997 million euro ($1.05 billion) fine imposed by EU antitrust regulators four years ago, dealing a major setback to EU antitrust chief Margrethe Vestager’s crackdown on Big Tech.

The European Commission in its 2018 decision said Qualcomm paid billions of dollars to Apple from 2011 to 2016 to use only its chips in all its iPhones and iPads in order to block out rivals such as Intel Corp […]

The General Court, Europe’s second-highest, annulled the EU finding and faulted the EU competition enforcer over the handling of the case.

“A number of procedural irregularities affected Qualcomm’s rights of defense and invalidate the Commission’s analysis of the conduct alleged against Qualcomm,” judges said.

“The Commission did not provide an analysis which makes it possible to support the findings that the payments concerned had actually reduced Apple’s incentives to switch to Qualcomm’s competitors in order to obtain supplies of LTE chipsets for certain iPad models to be launched in 2014 and 2015, ” they said.

9to5Mac’s Take

This is a surprising ruling, given the undisputed facts in the case.

We note that the court didn’t actually rule that the EU’s conclusion was incorrect, rather than it had failed to provide proof that Apple was influenced by the payments in respect of some specific iPad-related orders during two of the years in question. The ruling also references procedural errors by the EU, which the court says infringed on Qualcomm’s defense.

The question now is whether the EU appeals to the Court of Justice of the European Union (CJEU). My guess is yes, as the facts appear to be on the EU’s side, and to permanently lose this case would damage the credibility of the union’s crackdown on Big Tech antitrust issues.

Photo: Roman Synkevych 🇺🇦/Unsplash

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