US chip maker Qualcomm has been penalized $271 million by Europe due to “predatory pricing”, driving out a competitor from 3G hardware market. Margrethe Vestager, the European Commission’s antitrust official said that Qualcomm deliberately sold products below price cost to key customers to eliminate a competitor.
The Commission announced the 60% gain in shares by Qualcomm due to undercutting a UK rival Icera. The infringement occurred between 2009 and 2011 where Qualcomm sold 3G components below cost to Chinese phone companies Huawei and ZTE. Qualcomm however qualifies the accusation as meritless and appeals the decision.
Don Rosenberg of the general council states that the Commission investigated the sales of two customers who favored Qualcomm chips based on the technological inferiority of rival choosers and not on the grounds on price factors. The decision is however unsupported by law, economic principles or market facts. Icera was bought over by US chip maker Nvidia in 2011 and sues Qualcomm for forcing Icera out of the market.
This is not the first fine levied on Qualcomm by Europe. The European Union in 2018 fined $1.1 billion alleging Qualcomm to have paid to sign exclusivity contracts by major customers.
Qualcomm is again fined by China’s anti-monopoly bureau in 2015 for a sum of $975 million on violating its antitrust laws.
Companies like Apple, Amazon, Google and Facebook have all been probed as Europe emerges as to strengthen rules on data protection, taxation, and competition issues and hate speech.
Amazon is being investigated for using data from independent sellers. Google on the other has been fined $9.2 billion since 2017 by Europe. Apple has been previously examined by Vestager on the purchase of music app Shazaam but eventually approved. Apple repaid $14.6 billion due to tax breaks on Ireland in 2016. Facebook is also being investigated by Ireland’s Data Protection Commission over data breaches.
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