In tennis, there are four Grand Slam tournaments. In antitrust enforcement, there's no official equivalent, but I would argue that a company being held in violation of competition rules by the United States, the European Union and at least two major Asian jurisdictions has a legitimate claim to the crown. Last year, Qualcomm got sued by the Federal Trade Commission of the United States; just a month earlier it had been fined by the Korea Fair Trade Commission (KFTC); in October, the Taiwan Fair Trade Commission imposed a record fine of more than $700 million; and it had been fined in China a couple of years before. But one key jurisdiction was missing from this list (apart from reservations concerning Qualcomm's proposed acquisition of NXP): the European Union.
Not anymore: today the EU announced its decision to fine Qualcomm to the tune of €997 million, or well over $1.2 billion, for its exclusionary conduct in the years 2011-2016 when Apple was precluded from sourcing baseband chipsets from Qualcomm's competitors such as Intel. EU competition commissioner Vestager explained that "this case is about Qualcomm having taken measures to avoid competition on the merits" and that "a market dominated by just one company [...] needs extra vigilance." From the Commission's point of view, Qualcomm's exclusivity terms imposed on Apple--by offering huge rebates which Apple stood to lose had it bought a single chipset from a Qualcomm competitor--were clearly illegal.
I agree with the EU's antitrust actions against U.S. tech companies only about 50% of the time (at most), but with respect to Qualcomm, the EU Commission is right, and it's not the kind of outlier it has been in other contexts. In fact, it would have been an outlier if it had been the only major competition authority in the world to let Qualcomm off the hook at this stage.
What makes the Commission decision particularly remarkable is that, as the Commission's statement explains, the Court of Justice of the EU (CJEU) had held in September that loyalty rebates by a dominant player aren't necessarily illegal: the question is whether they would truly restrict competition by an equally efficient competitor. I'm sure Qualcomm's Brussels lawyers cited that decision over and over in their communications with the Commission. But the Commission concluded that it had strong "qualitative and quantitative evidence" to underpin its decision in an appeal-proof way. As Commissioner Vestager notes, "this is the Commission's first decision on an abuse of a dominant market position since the Court of Justice ruling on the Intel case last September."
The commissioner said in closing that the objective here was to ensure that "European consumers can enjoy the full benefits of competition and innovation." That's a laudable goal, and European consumers have undoubtedly paid more for mobile devices than they would have had to if not for Qualcomm's conduct. In some other cases involving U.S. technology companies, the Commission's actions have a lot less to do with protecting European consumers, competition, and innovation than with an attitude of "if you can't beat'em, tax'em." But in this case, the EU Commission has just joined the global antitrust mainstream.
I'm looking forward to the public redacted version of the decision...
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