This week, Qualcomm successfully appealed the 2019 997 million ($ 1 billion) fine imposed by EU regulators in 2019. The fine was originally paid after the European Commission paid chipmaker Apple billions of dollars between 2011 and 2016. Using its chips exclusively on all iPhones and iPads, this is a violation of EU no-confidence laws.
The decision to overturn the fine was found in Europe’s second-highest court, the General Court, to find that “many procedural irregularities have affected Qualcomm’s right to self-defense”, ultimately overturning the commission’s analysis.
The judgment commission was also highly critical of the basic aspects of the legal services process, including the fact that meetings with third parties were not recorded, or meeting notes were too common to properly understand the allegations made against Qualcomm.
A cause for concern?
Jack Meyers, a senior research fellow at the Center for European Reform, said the findings were a source of concern to the commission’s legal services that the issues were local at the time, making other decisions of the commission risky to appeal.
This is the second major loss for the commission on the waiver and incentive issue, after the ECJ canceled € 1 billion in antitrust fines on Intel in February.
Meyers said it could be even worse for the commission, noting that the ECJ is expected to deliver its verdict in the Google Android case in a few months, investigating whether Google had encouraged or required phone makers to pre-install. Google application and search capabilities on Android phones.
“Both Qualcomm and Intel’s judgment suggest that the court will critically evaluate the commission’s analysis,” Meyers said.
Given that there are now multiple occasions where the court has closely reviewed how the commission assessed that rebates were anti-competitive, this indicates that the court is concerned about the commission’s overall approach to rebates.
Myers explained that imposing a higher burden on commissions to properly analyze the competitive effects of rebates, a process that is data- and labor-intensive, could move commissions away from future rebate lawsuits and instead focus more. Cases of abusive exploitation, which fall under the new Digital Market Act.
“If the commission mistakenly condemns rebates and discounts as anti-competitive, there could be a lot of potential damage,” he said.
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