Justin Sullivan, Getty Images

Qualcomm Loses Bid to Stall $664,000 Daily Fines in EU Battle

July 17, 2017
While Qualcomm can continue to fight the EU’s demands, it must comply and hand over information to officials.

Qualcomm Inc. lost a court bid to stall European Union regulators from imposing daily fines of 580,000 euros (US$664,216) for failing to supply information for antitrust probes into the chip company’s sales tactics.

San Diego-based Qualcomm can’t continue to refuse answering regulators’ questions because it didn’t show its business or financial health was at risk, EU General Court President Marc Jaeger said in an order published on its website. While Qualcomm can continue to fight the EU’s demands, it must comply and hand over information to officials.

Qualcomm is exposed to penalties "in the range of several millions of euros" for not fully responding to EU data needed for the final stage of an investigation into below-cost sales of chipsets that aimed to squash a smaller rival, the EU court order said. The case is one of two antitrust probes the EU is weighing as it separately examines the company’s $47 billion takeover of NXP Semiconductors NV.

The risk of new fines adds another front to Qualcomm’s battles with regulators over its sales tactics as Apple Inc. ramps up a global dispute with the company, withholding billions of dollars in payments that’s forced Qualcomm to slash forecasts. Qualcomm has fought back by asking the International Trade Commission in Washington to stop versions of the iPhone that aren’t built with its chips from entering the U.S.

Qualcomm said the EU was forcing it to disrupt its business "in order to avoid the enormous daily penalty of 580,000 euros" and additional fines that it could receive for not handing over the data. Gathering the information requested by the EU would cost at least 3 million euros and thousands of working hours for 50 staff and 16 external advisers.

A few key employees in the company’s finance department would have to halt their regular duties to review "at least 120 boxes stored in an off-site warehouse facility," Qualcomm said.

The fines for not complying with the request are separate from a penalty regulators could impose if they find Qualcomm deliberately sold chipsets for internet dongles at below-cost from 2009 to 2011 to crush smaller competitor Icera, now owned by Nvidia Inc. The EU is also probing whether Qualcomm unfairly paid Apple to only use Qualcomm chipsets in its products.

Neither Qualcomm nor the European Commission immediately replied to requests for comment.

By Aoife White and Stephanie Bodoni

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!