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An appeals court has ruled that a $1 billion fine imposed on chipmaker Qualcomm for allegedly making illegal payments to Apple to maintain the installation of a modem in the iPhone will not stand.
“A number of procedural irregularities have affected Qualcomm’s rights of defense and invalidate the Commission’s analysis of the conduct alleged against Qualcomm,” the appeals court judges said in their ruling.
The ruling appears to be based on a lack of concrete evidence showing that Apple or the market as a whole has been harmed by Qualcomm’s conduct.
“The Commission has not provided an analysis to support the findings that the payments at issue affect Apple’s incentives to switch to Qualcomm’s competitors to supply LTE chipsets for certain iPad models that will be on the market in 2014 and 2015. will actually be put on the market.” the judges added.
The fine was imposed on Qualcomm in 2018 by European Commissioner for Competition Margrethe Vestager. Qualcomm almost immediately appealed to the courts and Wednesday’s ruling closes the door on the fine.
“Qualcomm paid billions of dollars to a key customer, Apple, so it wouldn’t buy from rivals,” Vestager said in a statement at the time. “These payments weren’t just price cuts — they were made on the condition that Apple would only use Qualcomm’s baseband chipsets in all of its iPhones and iPads.”
The EU ruling determined that Qualcomm’s market dominance in LTE baseband chipsets resulted in part from payments to Apple that violated EU antitrust rules. The EU found that the payment “deprived Qualcomm’s rival chipmakers from being able to compete effectively for Apple’s important business, no matter how good their products were”.
Internal documents seen by the EU revealed that Apple has “seriously considered” switching some of its baseband chipset offerings. But Qualcomm’s paid exclusive arrangement turned out to be a factor in which Apple didn’t change, according to the European Commission.
‘s report Reuters On Wednesday morning notes that the European Commission may appeal. It is not clear whether it will happen.
The appeals courts will then hear an appeal from Google, challenging the European Commission blockbuster that it charged for using Android to squeeze out rivals.