Four and a half years after the European Commission fined Qualcomm € 997 million for abusing a dominant position in the baseband LTE chipset industry, Qualcomm won the appeal. The reason: there were too many procedural errors.
So many procedural errors against Qualcomm
The new ruling is based on the finding of some procedural errors that have infringed Qualcomm’s rights of defense and on the analysis of the anti-competitive effects of the alleged incentive payments. The conclusion was that the sentence could only be declared void.
As regards the failure to respect Qualcomm’s rights of defense, the Court notes several errors made by the Commission in preparing the file. Also clarified were errors in limiting the decision to the LTE market but not UMTS, which could have had economic implications for Qualcomm. Consequently, by not consulting the company on this point, the Commission infringed its rights of defense.
The Court further notes that while the Commission concluded that Qualcomm’s “incentive payments” did indeed incentivize Apple to turn to competing suppliers for reduced LTE chipsets, it is evident from the Commission’s decision that Apple had no technical alternative to it. Qualcomm’s LTE chipset for most of its needs during the period in question, i.e. those that essentially corresponded to iPhones. The court therefore concluded that the Commission’s analysis was not carried out taking into account all the relevant circumstances and was therefore unlawful.
An appeal may be lodged against the decision of the Court, limited to questions of law, before the Court of Justice within two months and ten days of its notification. Now it’s back to the lawyers of the European Commission.
The second major defeat in six months
In January of this year, the second highest European court ruled in favor of the accused in a similar matter. The ruling, which overturned the € 1.06 billion antitrust penalty imposed on Intel by the EU, was issued by the European Union Court (TIP) at the end of January 2022.