Qualcomm Faces Daily Fine Threat After Losing In EU Probe

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Qualcomm Inc. faces the threat of being fined daily of 580,000 euros ($665,000) after the U.S. chipmaker a court bid to block a European Union order requiring it to provide information for an antitrust probe into the chip company’s sales tactics, losing an appeal against the penalty in an EU court on Monday.

The U.S. chipmaker, which was charged by the European Commission of using anti-competitive methods to freeze out British phone software maker Icera, asked the Luxembourg-based General Court to suspend the order last month.

EU Probe

Qualcomm can’t keep not responding to 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 keep up the 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 crush a smaller rival, according to the court order.

The company said the EU competition authority’s demand involved enormous work and significant financial costs estimated at no less than 3 million euros as it involved more than 50 employees and 16 external advisers, according to its court filing. Court President Marc Jaeger dismissed the appeal in a July 12 ruling.

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

Qualcomm Stock Performance

Currently, Qualcomm shares are down 0.19% to $56.70 in today’s session. The firm opened at $56.73 with a current session high of $56.92 and a session low of $56.60. The stock has a market capitalization of $84.75 billion, a P/E ratio of 18.89, and a dividend yield of 4.02%.

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Apple Charges Qualcomm in Beijing Seeking 1 Billion Yuan

Apple Inc filed a complaint against Qualcomm Inc in Beijing, appealing 1 billion yuan ($145.32 million) in compensations, charging the chip supplier abused its clout in the chip industry, Beijing’s Intellectual Property Court stated in a statement on Wednesday.

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Apple Inc filed a complaint against Qualcomm Inc in Beijing, appealing 1 billion yuan ($145.32 million) in compensations, charging the chip supplier abused its clout in the chip industry, Beijing’s Intellectual Property Court stated in a statement on Wednesday.

Qualcomm is a main supplier to both Apple and Samsung Electronics Co Ltd for “modem” chips that connect phones to wireless networks. Together, the  two companies accounted for 40% of Qualcomm’s $23.5 billion in revenue in its current fiscal year.

A second lawsuit was filed by Apple Inc against Qualcomm, which accused it of failing to live up to promises made to license “standard essential patents” widely and economically.

Qualcomm stated in an emailed statement that it had not seen the full complaint against it filed in the Chinese court. However, executive vice president and general counsel  of Qualcomm stated Qualcomm had offered Apple the same terms as other customers after a 2015 regulatory ruling in China and that his company would defend its business model in Chinese courts.

“These filings by Apple’s Chinese subsidiary are just part of Apple’s effort  to find ways to pay less for Qualcomm’s technology,” Rosenberg said in the statement. “Apple was offered terms consistent with terms accepted by more than one hundred other Chinese companies and refused to even consider them.”

The lawsuits follow a decision by the U.S. Federal Trade Commission to file a complaint on Jan. 17 in which it blamed Qualcomm of using anticompetitive strategies to uphold its monopoly of a key semiconductor used in mobile phones.

Apple followed with a corresponding complaint last Friday, It requested a federal court in California for $1 billion in promised rebates and alleged Qualcomm of overpricing for chips.

Qualcomm did not respond immediately to a request for comment. The firm previously stated that it would fight both the Federal Trade Commission (FTC) and the Apple complaint filed in the United States.

In additional, the chip creator faces legal trials across the world.

Oualcomm was fined by South Korea’s antitrust regulator for 1.03 trillion won ($854 million) in December for what it called unfair practices in patent licensing, a judgment the U.S. chip maker said it will contest in court.

In February 2015, Qualcomm paid a $975 million fine in China after  a 14-month probe, while the EU in December 2015 alleged it of abusing its market power to prevent rivals.

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