EU fines Qualcomm $272M for ‘predatory’ pricing
US-based chipmaker sold 3G baseband chipsets below cost with aim of forcing competitor out of market, says EU Commission
The European Commission on Thursday fined a U.S. chipmaker €242 million (some $272 million) for breaching competitive rules with "predatory pricing".
Qualcomm, which holds 60% of the market share, abused its market dominance by selling 3G baseband chipsets below cost to eliminate its competitor, the statement said.
The company sold Universal Mobile Telecommunications System (UMTS) chipsets below cost to two strategically important customers -- Huawei and ZTE -- for eliminating its competitor technology firm Icera, it stated.
"This behavior took place when Icera was becoming a viable supplier of UMTS chipsets providing high data rate performance, thus posing a growing threat to Qualcomm's chipset business," it added.
UMTS chipsets are used in smart devices for voice and data transmission, according to the press release.
Margrethe Vestager, a commissioner in charge of competition policy, said: “Qualcomm strategic behavior prevented competition and innovation in the market and this is illegal under EU antitrust rules.”
"Market dominance is, as such, not illegal under EU antitrust rules. However, dominant companies have a special responsibility not to abuse their powerful market position by restricting competition, either in the market where they are dominant or in separate markets," the statement said.
