EU fines chipmaker Qualcomm for 'predatory pricing'

European Antitrust Commissioner Margrethe Vestager talks to journalists during a news conference at the European Commission headquarters in Brussels, Thursday, July 18, 2019. The European Union has fined U.S. chipmaker Qualcomm $271 million, accusing it of "predatory pricing". (AP Photo/Francisco Seco)
FILE - This Wednesday, Feb. 14, 2018 file photo shows the logo for Qualcomm on a screen at the Nasdaq MarketSite, in New York. The European Union has fined U.S. chipmaker Qualcomm $271 million, accusing it of "predatory pricing." EU Antitrust Commissioner Margrethe Vestager said Thursday July 18, 2019, the U.S. company was abusing its market dominance in 3G baseband chipsets and said it sold below cost to force out a competitor. (AP Photo/Richard Drew, File)
European Antitrust Commissioner Margrethe Vestager talks to journalists during a news conference at the European Commission headquarters in Brussels, Thursday, July 18, 2019. The European Union has fined U.S. chipmaker Qualcomm $271 million, accusing it of "predatory pricing". (AP Photo/Francisco Seco)

BRUSSELS — The European Union on Thursday fined U.S. chipmaker Qualcomm $271 million, accusing it of "predatory pricing" to drive a competitor out of the market.

EU Antitrust Commissioner Margrethe Vestager said the U.S. company was abusing its market dominance in 3G baseband chipsets and sold below cost to force startup Icera out of the market. Icera was seen as a rival that could eventually threaten Qualcomm's dominance, Vestager said.

Vestager said the market was too important to tolerate such abuse.

"Baseband chipsets are key components so mobile devices can connect to the internet. Qualcomm sold these products at a price below cost to key customers with the intention of eliminating a competitor," she said.

The fine of 242 million euros represents 1.27% of Qualcomm's 2018 revenue. The EU had already fined Qualcomm $1.23 billion after concluding it bribed Apple to stifle competition.

Qualcomm said it plans to appeal Thursday's fine to an EU court and denied the charges.

"This decision is unsupported by the law, economic principles or market facts, and we look forward to a reversal on appeal," Don Rosenberg, general counsel of Qualcomm, said in a statement.

"The Commission spent years investigating sales to two customers, each of whom said that they favored Qualcomm chips not because of price but because rival chipsets were technologically inferior," Rosenberg said.

Qualcomm has been the focus of an antitrust case in the U.S. as well, with media reports this week saying that the government asked a court to pause enforcement of an antitrust ruling. 

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