Qualcomm won't have to pay $1 billion euro Apple modem payment fine

Credit: Qualcomm

The European Union has given up on its 1 billion euro penalty it levied on Qualcomm, after an appeals court ruled that the fine and trial were irregular and illegally applied.

In 2018 the Commission said from 2011 to 2016, US-based chip maker Qualcomm illegally edged its rivals out in a deal with Apple to keep using its LTE baseband chips for five years. It then fined Qualcomm 997 million ($991 million) for its behavior, citing antitrust rules.

Qualcomm later appealed the fine. A court stopped it in June 2022, saying there wasn't enough evidence to prove that Apple or the market was damaged by Qualcomm's deal with Apple.

The General Court, Europe's second highest court, criticized the European Commission in how it handled the case, a report on Monday says. The appeal notes that Qualcomm's right to defense was affected by procedural irregularities in the initial trial.

"A number of procedural irregularities affected Qualcomm's rights of defence and invalidate the Commission's analysis of the conduct alleged against Qualcomm," judges said.

Qualcomm entered into its exclusive agreement with Apple for iPhone modems in 2011, and again extended the deal in 2013 until the end of 2016. At the time, the EU found that Qualcomm's rival chip makers were "denied the possibility to compete effectively for Apple's significant business, no matter how good their products were."

Internal documents seen by the EU prior to application of the penalty found that Apple "gave serious consideration" to switching part of its baseband chipset supply well before it eventually did in the iPhone 7. The paid exclusive arrangement from Qualcomm proved to be a factor in Apple not changing, according to the European Commission.

Apple and Qualcomm just wound up one aspect of its continuing legal battle in the United States, though. In June 2022 U.S. Supreme Court declined to hear Apple's move to invalidate two patents from Qualcomm.

The two companies had reached a settlement in 2019, but the Court said Apple "lacked the standing" to pursue the case.