Qualcomm Wins EU Antitrust Appeal

The EU General Court ruled that Qualcomm will not need to pay a $1.2 billion antitrust fine largely because of “procedural irregularities.” Right. It won, in part, on a technicality.

“By today’s judgment, the General Court annuls, in its entirety, the Commission decision,” the ruling reads. “The General Court bases its conclusions on, first, the finding of a number of procedural irregularities which affected Qualcomm’s rights of defense, and, second, an analysis of the anticompetitive effects of the incentive payments.”

Qualcomm was fined $1.5 billion by the European Commission (EC) in February 2018 for colluding with Apple to ensure that only its mobile broadband chipsets were used in iPhones for several years. As the General Court notes of that decision, “the Commission took the view that [Apple’s] payments [to Qualcomm], which it characterized as exclusivity payments, were capable of having anticompetitive effects, in that they had reduced Apple’s incentives to switch to competing LTE chipset providers.”

As for the technicality bit, the court says that the EC “committed a number of irregularities when it was putting together the case file.” It didn’t record all of the interviews it conducted, for example, and it based its decision solely on LTE chipsets even though the actual complaint was related to  UMTS (Universal Mobile Telecommunications System) chipsets. On those points, the General Court found that “the Commission infringed Qualcomm’s rights of defense.”

The anticompetitive nature of Qualcomm’s collusion with Apple is perhaps more damning. Here, the court found that “the Commission failed to take account of all of the relevant factual circumstances.” That is, while the two companies did collude, “Apple had had no technical alternative to Qualcomm’s LTE chipsets … during the period concerned.” So it’s not like the collusion resulted in harm to some competitor. On this point, the General Court concluded that “the Commission’s analysis was not carried out in the light of all the relevant factual circumstances and that it is, therefore, unlawful.”

The EC could still appeal this decision, but it must do so within two months and ten days. But given how slowly things happen in the EU, we could be dealing with this long-dead issue many years from now.