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Qualcomm receives huge fine for buying its way into iPhones

by Danny Zepeda | January 24, 2018January 24, 2018 12:30 pm PST

Qualcomm has been fined $1.2 billion (€997 million) by the European Commission for paying Apple to exclusively buy its chips. This is the latest in a series of fines for Qualcomm, which has seen itself thrust into a series of legal battles with regulatory bodies and companies, including Apple.

The European Commission is accusing Qualcomm of paying off Apple to exclusively use its 4G LTE chips in its iPhones and iPads for a period of five years from 2011 to 2016. This of course established a monopoly for the chipmaker, guaranteeing its dominance in the LTE market.

In the press release, the European Commission argues that Qualcomm came to an agreement with Apple that would pay the iPhone maker billions of dollars if it exclusively used its chips. The agreement came with the caveat that the payments would only continue if Apple continued to use Qualcomm’s chips and if it ever switched supplier, Apple would have to pay some of the money back.

Internal documents show that during the duration of the deal, Apple gave consideration to switching but decided against it due to the agreement. It wasn’t until 2016 when the agreement expired that Apple started using Intel chips for the iPhone 7. Interestingly enough, this was soon followed by Apple’s legal battle with Qualcomm.

All of this is playing to the background of Qualcomm being sued by Apple for $1 billion, facing a $774.1 million fine from Taiwan regulators and fending off a $130 billion hostile takeover from rival Broadcom.


Danny Zepeda

Born and raised in Southern California, Danny grew up on a steady diet Pixar, Star Wars and Steven Spielberg movies. Unbeknownst to him, this was...

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