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Qualcomm fined $271 million by the EU for ‘predatory pricing’ of its chips

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The EU hit US chipmaking giant Qualcomm with an antitrust fine of 242 million euros ($271 million) Thursday, in another blow against a tech titan that is fighting competition battles in Asia and the US.

A sign on the Qualcomm campus is seen, as chip maker Broadcom Ltd announced an unsolicited bid to buy peer Qualcomm Inc for $103 billion, in San Diego, California, U.S. November 6, 2017. Image: Reuters.

The fine is the second mega penalty levelled against Qualcomm by Brussels, which made it pay 997 million euros in January 2018.

“Our investigation found that Qualcomm abused (its market) dominance between mid-2009 and mid-2011 by engaging in predatory pricing,” an EU statement said.

The chips in question in the EU case “are key components so that mobile devices can connect to the internet,” EU antitrust commissioner Margrethe Vestager said in a statement.

“Qualcomm sold these products at a price below cost to key customers with the intention of eliminating a competitor,” she added.

The EU competition enforcer has the power to fine companies up to 10 percent of global sales but fined Qualcomm about two percent of its world turnover, which stood at $22.73 billion in 2018.

The EU said that Qualcomm sold the chipsets to Chinese giants Huawei and ZTE, strategic customers, “with the intention of eliminating Icera, its main rival at the time”.

Icera was acquired in May 2011 by the US technology company Nvidia, which decided in 2015 to liquidate the business that was subject to the Commission’s investigation.

In a statement, Qualcomm said it would appeal the decision in order to “expose the meritless nature of this decision.”

The EU fine “is unsupported by the law, economic principles or market facts, and we look forward to a reversal on appeal,” said Don Rosenberg, general counsel of Qualcomm.

The blow against Qualcomm comes after a US court ruled in May that the firm “strangled competition” and must renegotiate price deals in a case with major implications for the smartphone market.

In recent years, Qualcomm was also slapped with fines in South Korea and Taiwan over anti-trust concerns.

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