Smartphone chip manufacturer Qualcomm has been fined $1.2bn by the EU for paying Apple “billions of dollars” to use only its chipsets in iPhones and iPads.
The European Commission said Qualcomm “illegally shut out rivals from the market for LTE chipsets for over five years”.
It said the illicit agreement made clear Qualcomm would cease the payments to Apple if it launched a device with a chipset supplied by a rival.
Furthermore, for most of the time the agreement was in place, Apple would have had to return to Qualcomm a large part of the payments it had already received if it switched suppliers
EU competition commissioner Margrethe Vestager said, “Qualcomm paid billions of US dollars to a key customer, Apple, so that it would not buy from rivals.
‘No rival could challenge Qualcomm’
“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.
“This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were.
“Qualcomm's behaviour denied consumers and other companies more choice and innovation – and this in a sector with a huge demand and potential for innovative technologies. This is illegal under EU antitrust rules and why we have taken today’s decision.”