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Qualcomm attacks EU’s Apple ‘bias’ in 4G court clash

Qualcomm attacks EU’s Apple ‘bias’ in 4G court clash
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Qualcomm Inc. accused European Union investigators of being “biased” towards Apple Inc. when they slapped it with a 997 million-euro ($1.48 billion Canadian) antitrust fine for allegedly pressuring the iPhone maker to only buy its 4G chips.

The European Commission “engaged in a biased investigation” and allowed Apple to “dictate the evidence, narrative and conclusions,” Miguel Rato, a lawyer for Qualcomm, told the EU General Court on Tuesday, citing an internal Apple memo. This was “gross and indefensible maladministration.”

On the first of three days of hearings in Luxembourg, Qualcomm said the 2015 document showed how EU officials “dealt with Apple secretly on several occasions,” before concluding in 2018 that the world’s largest smartphone chipmaker had made illegal payments to Apple to ensure only its chips were used in iPhones and iPads.

The 2018 fine, one of the bloc’s largest at the time, followed years of EU scrutiny and an earlier unsuccessful probe into the company. Qualcomm was handed a second EU penalty of 242 million euros in 2019. A newer probe into the company was dropped earlier this year.

Apple’s power over its suppliers is key to Qualcomm’s challenge, echoing a U.S. trial this week where Epic Games Inc. accuses Apple of abusing its might to extract high payments from developers.

Despite being accused of siding with Apple over Qualcomm, the EU has had its own long disputes with the U.S. tech giant. Last week Margrethe Vestager, the EU’s antitrust chief, escalated an antitrust probe over its App Store, more than four years after she ordered the company to pay billions of dollars in back taxes.

In Tuesday’s dispute, the EU said Qualcomm tied the hands of Apple and prevented rivals, such as Intel Corp., from selling to one of the world’s biggest device makers.

The EU’s case “is about some $3 billion that Qualcomm paid Apple in return for exclusivity over Apple’s requirements for chipsets compliant with the LTE standard on which 4G mobile communications are based,” Nicholas Khan, a lawyer for the commission, told the court.

Qualcomm’s agreements included “a carefully crafted combination of inducements through rising payments and threats through reimbursement obligations if exclusivity was broken,” Khan said. They “conferred significant strategic benefits” because Apple was so important in 2011 for the expanding market of LTE chipsets.
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