QCOM QUALCOMM Inc

By Laurence Norman 

BRUSSELS -- European Union competition authorities are imposing a EUR242 million fine on Qualcomm Inc., the second penalty from the EU in 18 months, and its latest move targeting top U.S. tech firms for breaching antitrust rules.

EU antitrust chief Margrethe Vestager said Thursday Qualcomm had abused its dominant position to drive a competitor out of business, hindering competition in the market for so-called baseband chips, which connect smartphones and tablets to cellular networks. Qualcomm is the world's largest supplier of baseband chips.

The fine comes amid several legal battles for Qualcomm, including in U.S. courts. The Department of Justice has warned that tough penalties may harm the U.S. chip maker in its race against Chinese competitors in the 5G business.

The European case stems from 2015, when a competitor to Qualcomm, British phone chip maker Icera alleged that between 2009-2011 the U.S. company engaged in "predatory pricing", selling certain chips at a price below the market to drive Icera out of business. Icera has since been bought by Nvidia Corp.

Qualcomm disputes the allegation.

However Ms. Vestager said Thursday that Qualcomm had sold its baseband chipsets "at a price below cost to key customers with the intention of eliminating a competitor."

"Qualcomm's strategic behavior prevented competition and innovation in this market, and limited the choice available to consumers in a sector with a huge demand and potential for innovative technologies," she added.

In January last year, the EU slapped a fine of $1.2 billion ($1.35 billion) on Qualcomm over payments made to Apple at the expense of another rival, Intel. The EU's first-level appeals court, the General Court, upheld the ruling in April and Qualcomm now is appealing to the EU's top court.

Since then, Qualcomm has faced growing legal troubles in the U.S. In May, a federal judge ruled that Qualcomm unlawfully stifled competition in the market for wireless chips.

The decision, which sided with the Federal Trade Commission in its antitrust suit against Qualcomm, delivered a major blow to a company that has been held up by the Trump administration as a keystone in U.S. technological competition with China.

Write to Laurence Norman at laurence.norman@wsj.com

(END) Dow Jones Newswires

July 18, 2019 06:00 ET (10:00 GMT)

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