US chipmaker Qualcomm fined €1bn by Brussels for collusion with Apple

US chipmaker Qualcomm has been fined €997m ($1.2bn) by the European Commission, after it was found to have illegally paid tech giant Apple billions of dollars to use its chips exclusively.

Qualcomm has long argued that the payments, made between 2011 and 2016, were fair. But the EU ruled that Qualcomm used them to shut out rivals, in breach of its antitrust rules, and that the chipmaker had abused its dominant market position.

Commissioner Margrethe Vestager, who is in charge of competition policy, said: "Qualcomm paid billions of US dollars to a key customer, Apple, so that it would not buy from rivals.

“These payments were not just reductions in price – they were made on the condition that Apple would exclusively use Qualcomm’s baseband chipsets in all its iPhones and iPads.

“This meant that no rival could effectively challenge Qualcomm, no matter how good their products were. Qualcomm’s behaviour denied consumers and other companies more choice and innovation.”

At a press conference, Vestager said Apple had been considering switching from Qualcomm’s chips to Intel’s, but that moving would have been too expensive under the deal. It only made the move once its deal with Qualcomm expired in 2016.

In a statement, Brussels said the fine took into account “the duration and gravity of the infringement” and was intended to deter any similar behaviour in the future.

It added that the fine represented 4.9% of Qualcomm’s 2017 turnover.

The EU launched its investigation in 2015, and is one of a number of investigations into Qualcomm in different markets. Qualcomm is the largest manufacturer of chips for smartphones.

In response, Qualcomm said it "strongly disagrees with the decision and will immediately appeal it" in the EU's general court.

“We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers,” said Don Rosenberg, executive vice president and general counsel of Qualcomm. “We have a strong case for judicial review and we will immediately commence that process.”