EU Regulator Fines Qualcomm $1.2 Billion for Paying Apple to Use Its Mobile Chips

Qualcomm has been hit with a 997 million euro ($1.2 billion) fine by EU antitrust regulators for paying Apple to use its LTE chips in iOS devices, Reuters reported on Wednesday. According to the European Commission's investigation, the payments to Apple occurred from 2011 to 2016, and were made with the sole aim of blocking Qualcomm's LTE chipset market rivals, such as Intel.

"Qualcomm paid billions of U.S. dollars to a key customer, Apple, so that it would not buy from rivals. These payments were not just reductions in price – they were made on the condition that Apple would exclusively use Qualcomm's baseband chipsets in all its iPhones and iPads," European Competition Commissioner Margrethe Vestager said in a statement.

"This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were," she said.

The EU fine – said to represent 4.9 percent of Qualcomm's 2017 turnover – is particularly bad news for the company, as it could put it at increased risk of a $103 billion hostile takeover bid by rival U.S. chipmaker Broadcom. Separately, Qualcomm is also in an ongoing legal battle with Apple over smartphone chips.

The troubles began for Qualcomm in January 2017 when the Federal Trade Commission complained that it had engaged in anticompetitive patent licensing practices. Soon after, Apple sued the chipmaker for $1 billion, accusing it of charging unfair royalties for "technologies they have nothing to do with" and refusing to pay quarterly rebates. A Qualcomm countersuit followed in April, and the dispute escalated throughout the year with expanded lawsuits and claims lodged by both sides.

The last legal volley between the two came in November, when Apple countersued Qualcomm with a patent infringement claim, after the latter company sought iPhone and iPad import bans in the United States last summer.