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EU Fines Qualcomm $1.2 Billion for Paying Apple To Use Its Microchips (apnews.com)
The European Union on Wednesday slapped a $1.23 billion fine on U.S. chipmaker Qualcomm for abusing its market dominance in the lucrative sector of components in smartphones and tablets for half a decade. From a report: EU Commissioner Margrethe Vestager said that San Diego-based Qualcomm "illegally shut out rivals from the market" for more than five years by paying key customer Apple to not use chips made by Qualcomm's rivals. Vestager said Qualcomm paid "billions of dollars" to Apple and in the process helped establish itself as the dominant force.
It was in Qualcomm's interest to pay Apple billions because it obviously served to discourage the development of a competing designs by Qualcomm's competitors.
But it also served Apple's interests because getting such good terms meant they would get a parts-cost advantage vs all their smartphone competitors while at the same time assuring those competitors would not have a lower-cost alternative available to them from a Qualcomm competitor.
Monopolistic synergy.
Is it illegal to "pay to play"? How is Qualcomm paying to be an exclusive provider not just a contract agreement of service? I thought this happens in a lot of industries. How is it different to offering a bulk-discount if you buy x million chips from us? (essentially doing the same thing)
I know some grocery stores accept money from companies to guarantee certain shelf-space; for example.
If Qualcomm had paid to guarantee they be used for just 99% of chips supplied would that still be illegal (obviously Apple would just get all from them in that case, because wouldn't make sense to change hardware to allow a second chip for 1% of products).
"That's the way to do it" - Punch
Qualcomm will just file this under their expenses along with costs of labour, real estate, vendors and all other business expenses.
Their market position they gained from this behaviour is worth far more than 1.2 billion in the long run.
They should be forced to relinquish their patents in order to allow real competition to grow.
This was just a decision that was for the people made by the people.
Americans will find that attitude very un-American.
Don't fight for your country, if your country does not fight for you.
Except that they are not allowed to continue doing it. If they do, there will be another bigger fine, and so on util they go bankrupt or stop.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
I'm sorry, but I'm really struggling to figure out how this is wrong.
What part of "paying key customer Apple to not use chips made by Qualcomm's rivals" you didn't get?
Hint: it's not about "discounts" and it's not about beating the competition with a better product; it's about abusing your market dominance to prevent rivals from even competing in the market.
Or is competition good only when it fits your narrative?
RT.
They quite happily fine EU companies too. Though one suspects that EU companies are more aware what practices are illegal in the EU and are thus less likely to break them and consequently less likely to be fined. However Qualcomm are a multi billion dollar company operating globally, it is not unreasonable to expect them to be aware that what they where doing was illegal in what is the largest single market in the world, and I am not going to cry when they get fined for breaking the law.
The EU has no authority in the U.S.
It's normal business for a company to give a big discount to use their product. if the payout took place in the U.S. there is nothing the E.U. can do about it.
I would never pay their fine.
The EU absolutely has authority over what companies that operate within the EU do. There are many-many cases where the US has passed punitive measures against companies not based in the US too. This isn't something only the EU does.
"That's the way to do it" - Punch
It's a strange way of say that apple paid less than the full amount. Perhaps there is something in european law that forbids a discount to a customer, making the mechanism of giving a discount to a customer illegal. But surely, discounting for a large customer is in general legal???
I could imagine some possible conditions that might matter. Qualcom owns many of the standards it's parts implement. In come cases it licences those via FRAND rules in return for the adoption of proprietary methods as the standard. And it may well be that under FRAND one is not allowed to charge one customer more than another. In that case, for the portion of the chips value attributable to the licensed algorithms, they could not discount it to apple. But there's the actual chip itself too. that has some value and they could discount that.
So I'm really puzzled why this is not normal bussiness
Some drink at the fountain of knowledge. Others just gargle.
Yeah such a shithole - worlds richest economy and manages to give free healthcare, free university education in most member states, a minimum 20 days paid annual leave and many many other rights to every single one of its citizens that the USA doesn't.
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