Qualcomm Faces Fines After Losing Court Bid in EU ProbeBy and
Company is battling EU over information for antitrust probe
EU court says Qualcomm can’t keep refusing to answer EU
Qualcomm Inc. faces fines of 580,000 euros ($665,000) per day after losing a court bid to block a European Union order requiring it to supply information for an antitrust probe into the chip company’s sales tactics.
Qualcomm must answer 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 continue to fight 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" if it continues to resist the demand for the data, needed in the final stages of an EU investigation into predatory pricing of chipsets, according to the court order. The company was given a deadline of June 30 to respond to questions it hadn’t already answered.
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 slash 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.
The case is one of two antitrust probes the EU is weighing as it separately examines the company’s $47 billion takeover of NXP Semiconductors NV. Qualcomm declined to comment. The European Commission said it welcomed the court order.
Qualcomm said the EU was forcing it to disrupt its business “in order to avoid the enormous daily penalty of 580,000 euros" and additional fines that it could receive for not handing over the data. Gathering the information requested by the EU would cost at least 3 million euros and thousands of working hours for 50 staff and 16 external advisers.
A few key employees in the company’s finance department would have to halt their regular duties to review "at least 120 boxes stored in an off-site warehouse facility," Qualcomm said.
The fines for not complying with the request are separate from a penalty regulators could impose if they find Qualcomm deliberately sold chipsets for internet dongles at below-cost from 2009 to 2011 to hinder competitor Icera, now owned by Nvidia Inc. The EU is also probing whether Qualcomm unfairly paid Apple to only use Qualcomm chipsets in its products.