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posted by janrinok on Wednesday January 24 2018, @06:41PM   Printer-friendly
from the hit-them-in-the-pocket dept.

Qualcomm Gets $1.2 Billion EU Fine for Apple Chip Payments

Qualcomm Inc. was fined 997 million euros ($1.2 billion) by the European Union for paying Apple Inc. to shun rival chips in its iPhones.

The largest maker of chips that help run smartphones "paid billions of U.S. dollars to a key customer, Apple, so that it would not buy from rivals," EU Competition Commissioner Margrethe Vestager said in an emailed statement on Wednesday. "This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were."

Qualcomm struck a deal with Apple in 2011 that pledged significant payments if Apple only used Qualcomm chipsets for the iPhone and iPad devices. That agreement was renewed in 2013 until 2016. Qualcomm warned it would stop these payments if Apple sold another product with a rival chip. This effectively shut out competitors such as Intel Corp. from the market for LTE baseband chipsets used in the 4G mobile phone standard for five years, the EU said.

European Commission press release. Also at Reuters.

Previously: EU Investigates Qualcomm For Antitrust Activities
U.S. Federal Trade Commission Sues Qualcomm for Anti-Competitive Practices
Apple Could Switch From Qualcomm to Intel and MediaTek for Modems

Related: Apple vs. Qualcomm Escalates, Manufacturers Join in, Lawsuits Filed in California and Germany
Qualcomm Files New Lawsuit Against Apple, Alleging it Shared Confidential Information with Intel
Broadcom Offers $105 Billion for Qualcomm; Moves HQ Back to the USA


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  • (Score: 4, Informative) by zocalo on Wednesday January 24 2018, @10:35PM (2 children)

    by zocalo (302) on Wednesday January 24 2018, @10:35PM (#627431)
    I can't speak for the current US anti-corruption laws, but the EU has some very strict rules about a potential supplier using cash to sweeten a deal, and that seems to be the reasoning behind fining Qualcomm here. To illustrate the difference, consider the following scenarios:

    Scenario 1: Apple asks several chip vendors to give them a price for the supply of chips. Qualcomm comes back with the best bang per buck, but adds a rider that the deal only applies if they are the sole supplier for a given period of time. Apple decides that Qualcomm's offer is the best value for money and signs up to the exclusivity deal. This is perfectly legal, and quite common - e.g. the selection of soft drinks in fast food outlets.

    Scenario 2: Apple asks several chip vendors to give them a price for the supply of chips. Qualcomm responds with their offer, but also offers an additional chunk of cash in order to *become* Apple's sole supplier - a kickback, in otherwords. EU anti-corruption law is very clear on this, and that cash is seen as a bribe - even if the total amount of chips and cash to be exchanged was identical to Scenario 1. Apple should have been well aware of this and walked away from Qualcomm right there and then, regardless of how good the rest of Qualcomm's offer might have been.

    There's also another aspect to this - the EU views offering a bribe *and* accepting a bribe as corruption, which means that if they're following their own rules then they will almost certainly be thinking about prosecuting both the Apple execs responsible for making the deal and Apple the company for not preventing them from doing so.
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    UNIX? They're not even circumcised! Savages!
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  • (Score: 0) by Anonymous Coward on Thursday January 25 2018, @07:33AM (1 child)

    by Anonymous Coward on Thursday January 25 2018, @07:33AM (#627588)

    the EU views offering a bribe *and* accepting a bribe as corruption,

    and that is a problem. Offering a bribe should *never* be corruption. Taking a bribe should always. Only this way can we route out all corruption.

    When both are illegal, there is no incentives for either side to report the crime.

    • (Score: 3, Insightful) by zocalo on Thursday January 25 2018, @07:58AM

      by zocalo (302) on Thursday January 25 2018, @07:58AM (#627592)
      Bullshit. If there's no penalty for offering a bribe then you might as well offer one every time in the hope that you are dealing with someone corrupt enough to accept it because there's no penalty for not doing so. If both are illegal then every time you offer a bribe you run the risk that the intended recipient doesn't want to take the risk and will report your offer. Both legal scenarios are vulnerable to a third party whistleblower, so there's no change there, but if offering a bribe is more common because there's no risk in doing so then there are far more opportunities for people to get the impression it's the "done thing" and decide to take the risk of accepting it - hardly something that's going to help root out all corruption.
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      UNIX? They're not even circumcised! Savages!