The EU’s General Court said ‘procedural irregularities’ had affected Qualcomm’s rights of defence, while Apple had ‘no technical alternative’ for sourcing LTE chipsets.
A €997m antitrust fine imposed on Qualcomm has been annulled today (15 June) by the European General Court, marking a major blow to the EU’s crackdown on Big Tech.
The European Commission fined Qualcomm in 2018, claiming that the chipmaker had abused its dominant market position by making significant payments to Apple on the condition that it would not buy chipsets from any rival producers.
The Commission said this benefitted Qualcomm’s LTE baseband chipsets and shut out rival manufacturers such as Intel.
But the General Court, the second highest in the EU, has now overturned the fine following an appeal by Qualcomm.
In the appeal verdict, the court said it found issues with how the European Commission handled the case.
“The General Court observes that a number of procedural irregularities affected Qualcomm’s rights of defence and invalidate the Commission’s analysis of the conduct alleged against Qualcomm,” it said.
The court said the contested decision was on the potential abuse of Qualcomm’s market position with LTE chipsets. However, the original statement of objections also referenced abuse in the UMTS (Universal Mobile Telecommunications System) chipset market.
The court said that changes to the scope of the investigation meant that Qualcomm could not properly adapt its analysis, which “infringed Qualcomm’s rights of defence”.
The court also disagreed with the European Commission’s analysis that Qualcomm’s payments to Apple were in breach of antitrust laws.
“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 General Court said.
The European Commission now has two months and 10 days to appeal the General Court’s decision to the European Court of Justice. The Commission told Reuters that it would study the judgement and its implications and consider the next steps.
It marks another major defeat for the European Commission and Margrethe Vestager, the EU competition commissioner who has been tasked with taking on Big Tech. In January, Intel won its appeal against a $1bn fine levied by the European Commission more than 12 years ago.
Other fines are still holding firm against appeals, however. Last November, the General Court upheld a €2.42bn antitrust fine given to Google in 2017 by the European Commission following what it found was a breach of competition laws, which marked a big win for Vestager.