Qualcomm to Appeal European Commission Finding on Decade-Old Chip Shipments

--Finding concerns sales of three chipsets to two customers between 2009 and 2011--

Jul 18, 2019 SAN DIEGO

Qualcomm has announced that the European Commission'€™s Directorate General for Competition, after a 10-year investigation, issued a finding that Qualcomm engaged in predatory pricing practices for some sales of three cellular baseband chipsets to two customers during a few calendar quarters between 2009 and 2011, and fined Qualcomm 242 million euros. Qualcomm plans to appeal the finding to the General Court of the European Union. Qualcomm intends to provide a financial guarantee in lieu of paying the fine while the appeal is pending.

The Commission spent years investigating sales to two customers, each of whom said that they favored Qualcomm chips not because of price but because rival chipsets were technologically inferior. This decision is unsupported by the law, economic principles or market facts, and we look forward to a reversal on appeal,€ said Don Rosenberg, executive vice president and general counsel of Qualcomm.

The Commission'€™s decision is based on a novel theory of alleged below-cost pricing over a very short time period and for a very small volume of chips. There is no precedent for this theory, which is inconsistent with well-developed economic analysis of cost recovery, as well as Commission practice. Contrary to the Commission's findings, Qualcomm's alleged conduct did not cause anticompetitive harm to Icera, the company that filed the complaint. Icera was later acquired by Nvidia for hundreds of millions of dollars and continued to compete in the relevant market for several years after the end of the alleged conduct. We cooperated with Commission officials every step of the way throughout the protracted investigation, confident that the Commission would recognize that there were no facts supporting a finding of anti-competitive conduct. On appeal we will expose the meritless nature of this decision.