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Qualcomm investors in the United States seem not to be confident in the news yet as the company’s shares are down.
These are good times for Qualcomm Inc (NASDAQ: QCOM), an American multinational company that creates semiconductors, software, and services related to wireless technology as it recently won its antitrust battle in the European Union (EU). The European General Court, the second-highest legal body in the EU, ruled against the bloc’s Antitrust Chief, Margrethe Vestager, noting that the approach adopted in pursuing the case ruled out any option that can help Qualcomm in drawing on its rights to defense.
The EU Antitrust body brought on the enforcement action worth 997 million euros ($1.05 billion) against the tech giant back in 2018. The regulator said Qualcomm paid billions of dollars to Apple Inc (NASDAQ: AAPL) in order for the iPhone maker to monopolize only its chips on its mobile phones and iPad models. The regulator said such a move was initiated with the intention to block out rivals like Intel Corporation (NASDAQ: INTC).
In the ruling, judges of the General Court faulted how the regulator handled the case from the beginning;
“A number of procedural irregularities affected Qualcomm’s rights of defence and invalidate the Commission’s analysis of the conduct alleged against Qualcomm,” they said, adding; “The Commission did not provide an analysis which makes it possible to support the findings that the payments concerned had actually reduced Apple’s incentives to switch to Qualcomm’s competitors in order to obtain supplies of LTE chipsets for certain iPad models to be launched in 2014 and 2015.”
Is Qualcomm Now Free from the Antitrust Battle?
As it stands, Qualcomm is in the win and might be right to take on the victory for now. Vestager and the antitrust body may still appeal the decision after analyzing in detail the decision and its impact across the board.
The appeal could be filed to the European Union Court of Justice (CJEU), Europe’s highest court in the coming weeks; a move, if acted on, may swing either in favor of the regulator or the company. The judgment handed out by the General Court is the second such ruling that has specifically targeted Vestager’s fight against big tech.
Earlier this year, she lost a fight in which she sued Intel for 1.06 billion euros for alleged anti-competitive practices the chipmaker accused the company of being guilty of some 12 years ago. The Intel antitrust lawsuit allegedly involves targeted attempts to squeeze out rivals like Advanced Micro Devices Inc (NASDAQ: AMD). The General Court also ruled against Vestager and in favor of Intel.
“The high-level conclusion is that the Court is telling the Commission to be extremely cautious in pricing abuses,” said Assimakis Komninos, a partner at law firm White & Case, adding that “The Commission will now be very hesitant to start investigations into such cases unless they are really sure.”
Qualcomm investors in the United States seem not to be confident in the news yet as the company’s shares are down by 2.30% to $128.01 in the pre-market.