Friday, June 2, 2023 | Back issues
Courthouse News Service Courthouse News Service

Brussels defends Qualcomm antitrust fine at EU court 

A lawyer for the bloc’s executive branch accused the semiconductor maker of casting a wide net of arguments “to see if something sticks.”

LUXEMBOURG (CN) — The European Commission defended its 2019 fine against Qualcomm for predatory pricing on Tuesday, telling judges at the European Union’s second-highest court that the company knew its behavior was illegal.

The San Diego-based tech giant is at the European General Court contesting a 242 million euro ($259 million) fine for selling its electronic chipsets at a loss in an alleged attempt to drive competitors out of the market.

Three days of hearings opened on Monday at the Luxembourg-based court with Qualcomm’s lawyers accusing the European Commission, the EU's executive body, of fabricating a case and dragging the investigation on for too long.

Brussels pushed back on Tuesday, saying Qualcomm’s 15-point appeal was a haphazard attempt to find some argument the judges might be sympathetic to.

“Qualcomm is making as many arguments as possible to see if something sticks,” commission lawyer Martin Farley told the three-judge panel. 

The sprawling appeal ranges from refuting the assertation that Qualcomm had a dominant position in the market to technical arguments about cost calculations.

The allegations of wrongdoing date from 2009 to 2001. At the time, Brussels claims Qualcomm was deeply concerned about startup rival Icera, which was producing rival chipsets for now nearly obsolete technology called “dongles" that allow tablets and laptops to connect to Wi-Fi. 

The commission argues Qualcomm’s arguments overlap substantially, with Farley warning that his own arguments in response might give judges a sense of deja vu.

“Like all good sequels, we will be revisiting much from the first round,” he said. 

The points were so interconnected that a lawyer for Qualcomm began making statements in the morning on portions of the appeal scheduled for the afternoon, only stopping when the presiding judge cut her off for running substantially over time. 

A 2015 investigation concluded that, in an attempt to drive Icera out of the market, Qualcomm sold its chipsets at a steeply discounted price to block rivals from selling their own in a practice known as predatory pricing. 

The company argues its pricing, including discounts, was based on its longstanding customer relationships with Chinese telecom companies ZTE and Huawei and was not anti-competitive. But the commission claims internal documents showed that the pricing strategy was designed to undercut Icera.

“It was accurately aware of the legal limits on its conduct,” Farley said. 

By the afternoon, patience had stretched thin on both sides.

Lawyer Maurits Dolmans argued the commission’s financial assessment was underpinned by “Nobel Prize-winning thinking,” quoting Paul Milgrom, an American who won the field’s top award in 2020. 

Dolmans was attempting to trump the appearance of actual economists in court by both sides, an unusual move at the court which usually only hears from legal professionals. He is representing California-based Nvidia, which bought Icera in 2011 and has intervened in the case. 

"I don’t know about the Nobel but the Oscars were two days ago and someone in this room deserves one,” Qualcomm lawyer Marixenia Davilla fired back. 

Tuesday afternoon's hearing eventually moved into a closed session so the parties could discuss confidential information. Much of the information around the specific prices and costs related to the chipsets is redacted for corporate secrecy reasons. 

Hearings in the case continue on Wednesday.

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.