Qualcomm faces €580k a day EU fine

Qualcomm, which makes chips for mobile phones, faces fines of €580,000 a day after losing a court bid to block an EU order requiring it to supply information for a competition probe into the company’s sales tactics.

Three years ago, the global firm set up an information technology base in Cork, with the IDA-backed firm announcing plans to hire 100 staff.

Qualcomm can’t continue to refuse to answer regulators’ questions because it didn’t show that the EU demand put its business or financial health at risk, EU General Court president Marc Jaeger said in an order on the tribunal’s website.

While San Diego-based Qualcomm can continue to fight over the issue, it must comply and hand over information to officials.

Qualcomm could be on the hook for penalties “in the range of several millions of euros” for resisting the call for the data, needed in the final stages of an EU investigation into predatory pricing of chipsets that aimed to squash a smaller rival, according to the court order.

The case is one of two competition probes the EU is weighing as it examines the company’s $47bn (€41bn) takeover of NXP Semiconductors. Qualcomm declined to comment.

The risk of new fines adds another front to Qualcomm’s battles with regulators over its sales tactics as Apple ramps up a global dispute with the company, withholding billions of dollars in payments that has 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 US.

Qualcomm said the EU was forcing it to disrupt its business “in order to avoid the enormous daily penalty of €580,000” and additional fines that it could receive for not handing over the data.

Gathering the information requested by the EU would cost at least €3m 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”, said Qualcomm.

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 thwart competitor Icera, now owned by Nvidia. The EU is also probing whether Qualcomm unfairly paid Apple to only use Qualcomm chipsets in its products.
n Bloomberg and Irish Examiner staff


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