EU Regulator Fines Qualcomm $1.2 Billion for Paying Apple to Use Its Mobile Chips

[Abazigal]

Perhaps but there was another choice here - not make a phone and report Qualcomm to the appropriate authorities. It wouldn't have made Apple as much money but increasingly this seems to be the problem with all companies, prioritising making money over other concerns. Apple maybe better behaved than some (and worse the others) but that doesn't make it right.

At the end of the day capitalism is an excellent mechanism for distributing limited resources and encouraging innovation but without a moral foundation, we're all just animals, it's just we're hunting "dollar bills" instead of other, wild-er animals.

At the time, the iPhone was a product Apple had staked their entire future on. Not selling it may well have ruined the company, when you consider how much of Apple's success today is predicated on the iPhone.

I am not sure it’s reasonable to expect companies to do what you suggested. I admit it would be awesome if they did though.

 

[69Mustang]

At the time Apple signed the contact, it was either agree to Qualcomm’s terms or have no modems to manufacture iPhones. What were you expecting Apple to do? Walk away and jeopardise the entire company?

If Apple was forced to agree to terms, I highly doubt there would be a rebate in the contract. If Qualcomm held all the cards there would be no reason to offer a rebate. If Qualcomm held all the cards, I doubt the contract would have gone through intermediaries (contract manufacturers). It would have been directly with Apple. Apple wasn't forced to accept the contract. Apple had bargaining power just like Qualcomm. They both saw the benefits of working together. It just became less beneficial to Apple in the later years. Qualcomm just said Big Boy pants. You simply can't create a victim in this.

 

[BootsWalking]

In case anyone is wondering why Apple isn’t being faulted for accepting what might be construed as a bribe, at the time Qualcomm demanded these terms of Apple, there were no other LTE modems for Apple to buy, so the choice for Apple was to either go with the contract Qualcomm offered, or not make any phones. The whole point of Qualcomm’s restrictive practices was to stop companies like Intel from developing LTE modems by restricting who Intel could strike a deal with for supply.

Apple is as much a victim here.

LOL, if that were true then Qualcomm wouldn't have needed to pay Apple billions of dollars to keep them as their exclusive modem supplier. Businesses don't offer these types of terms when they have the upper hand. It's clear Qualcomm did this to discourage third-parties from designing competing modems but to say Qualcomm would've shut Apple out if they didn't agree to such exclusive terms is ludicrous. Apple agreed to it because it was advantageous for them to do so - to the detriment of competition in the modem market.

The mental contortions people go through to make Apple look like the good guy in every scenario is breathtaking.

 

[makr]

It seems like every time the EU needs money, they sue / fine a company ?

Any proof of this?
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Why would Qualcomm pay anyone? Their modem chips are way superior to the ones from Intel. The iPhone 7/8/X with Intel is absolute garbage in low signal areas!

Please read the article until you get the point.

 

[DEMinSoCAL]

In case anyone is wondering why Apple isn’t being faulted for accepting what might be construed as a bribe, at the time Qualcomm demanded these terms of Apple, there were no other LTE modems for Apple to buy, so the choice for Apple was to either go with the contract Qualcomm offered, or not make any phones. The whole point of Qualcomm’s restrictive practices was to stop companies like Intel from developing LTE modems by restricting who Intel could strike a deal with for supply.

Apple is as much a victim here.

Worldwide, Android is just as big, if not bigger, a slice of the smartphone pie as Apple. Aren't non-Apple smartphones a lucrative target for Intel?

 

[Abazigal]

If Apple was forced to agree to terms, I highly doubt there would be a rebate in the contract. If Qualcomm held all the cards there would be no reason to offer a rebate. If Qualcomm held all the cards, I doubt the contract would have gone through intermediaries (contract manufacturers). It would have been directly with Apple. Apple wasn't forced to accept the contract. Apple had bargaining power just like Qualcomm. They both saw the benefits of working together. It just became less beneficial to Apple in the later years. Qualcomm just said Big Boy pants. You simply can't create a victim in this.

The "bribe" is a discount to reasonable prices on FRAND. It was essentially price gouging if Apple didn’t play along. More like extortion.

Apple had to play along because there was no other alternative at the time. In essence, Qualcomm used Apple as a vehicle to quash development of LTE modems by other manufacturers. That’s why Apple are suing Qualcomm for the unfair contracts they made them sign.

And about time. The whole mobile industry has such a dependence on Qualcomm that’s so ugly, this status quo is in dire need of shaking.

 

[69Mustang]

The "bribe" is a discount to reasonable prices on FRAND. It was essentially price gouging if Apple didn’t play along. More like extortion.

Apple had to play along because there was no other alternative at the time. In essence, Qualcomm used Apple as a vehicle to quash development of LTE modems by other manufacturers. That’s why Apple are suing Qualcomm for the unfair contracts they made them sign.

And about time. The whole mobile industry has such a dependence on Qualcomm that’s so ugly, this status quo is in dire need of shaking.

You're conflating separate issues into one unifying theme. Afaik, that was a 5 year contract running from 2011-2016. Qualcomm would have lost just as much as Apple if they weren't working together. The picture you're trying to paint, doesn't add up chronologically or logically. It doesn't matter. You somehow see Apple as a victim in this instead of a partner. There's nothing that going to change that for you. Let's just agree to disagree.

 

[Akiainavas]

It seems like every time the EU needs money, they sue / fine a company ?

Yes, amusing...

It seems like every time a company breaks the law, they sue / fine them. And so they should. At least someone has the ball

Or are you one of those people that think it’s ok for multi-billion corporations to break laws, evade taxes and whatever, because... I can’t even think of a reason to put here ?

There’s a good reason why anti-monopoly laws exist everywhere in the world. Look it up, you might learn something today.

 

[tooltalk]

In case anyone is wondering why Apple isn’t being faulted for accepting what might be construed as a bribe, at the time Qualcomm demanded these terms of Apple, there were no other LTE modems for Apple to buy, so the choice for Apple was to either go with the contract Qualcomm offered, or not make any phones. The whole point of Qualcomm’s restrictive practices was to stop companies like Intel from developing LTE modems by restricting who Intel could strike a deal with for supply.

Apple is as much a victim here.

According to Qualcomm's countersuit, Qualcomm did not demand exclusivity in exchange for rebates first -- Apple proposed that as part of their business agreement and Qualcomm acquiesced to Apple's demand. Then Apple turned around started telling regulators around the world that Apple was FORCED into that exclusivity. Further, unlike US lawsuits, Qualcomm was not allowed to counter Apple's accusation -- Qualcomm's only recourse was to withhold Apple's debates for breaking their business agreement which forbids Apple from giving false testimony to regulators.

Unless there are other victims of Qualcomm's exclusivity rebate agreement, I'm inclined to believe that Qualcomm was tricked by Apple's clever lawyering.

 

[RedKite]

I rather do like the anti-monopoly laws the EU has.

 

[tooltalk]

At the time Apple signed the contact, it was either agree to Qualcomm’s terms or have no modems to manufacture iPhones. What were you expecting Apple to do? Walk away and jeopardise the entire company?

This is fundamentally flawed narrative. First, Apple is never the "first" to adapt the latest wireless communication technology. Second, Qualcomm did not demand that exclusivity -- Apple demanded "discount" (or rebates) and offered that exclusivity in exchange.
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The "bribe" is a discount to reasonable prices on FRAND. It was essentially price gouging if Apple didn’t play along. More like extortion.

Apple had to play along because there was no other alternative at the time. In essence, Qualcomm used Apple as a vehicle to quash development of LTE modems by other manufacturers. That’s why Apple are suing Qualcomm for the unfair contracts they made them sign.

And about time. The whole mobile industry has such a dependence on Qualcomm that’s so ugly, this status quo is in dire need of shaking.

No. Offering "discount" based on volume sales or longer contract duration is not considered a "bribe"; nor is it against FRAND terms. Apple never plays along with any suppliers -- they are always in the driver's seat. Apple wasn't getting their way with wireless patent holders, so this is what they have come up with.

 

[pratikindia]

Qualcomm has superior chips compared to rivals. Who in the right mind will use slower chips?

 

[macs4nw]

This is great. They paid Apple and now they’re paying again! Kudos to their lawyers!!

If anything, this underlines how fine the line can be sometimes between smart, one-upmanship, illegal, predatory, unethical, etc.

Also in some instances, it underscores the different accepted business practices between different countries or continents. The eventual ramifications of this will be interesting to say the least, and they may very well set the tone for international business conduct in the future.

 

[VulchR]

It seems like every time the EU needs money, they sue / fine a company ?

That the EU is enforcing the law is fine by me.
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If anything, this underlines how fine the line can be sometimes between smart, one-upmanship, illegal, predatory, unethical, etc.

The line seems pretty clear to me, and evidently, the EU.

 

[Mirice99]

I wonder if Apple will fight this EU ruling the same way they are fighting a recent EU decision....

 

[kdarling]

And before they bought from Intel, they didn't buy from Intel.

Right, they used to buy from Infineon. Whom Intel later bought. And then bought the CDMA rights of Via Telecom.

Why would Qualcomm pay anyone? Their modem chips are way superior to the ones from Intel. The iPhone 7/8/X with Intel is absolute garbage in low signal areas!

Good question.

According to Qualcomm, Apple threatened to use WiMAX for 3G instead of (W)CDMA unless Qualcomm paid them not to. Which at least makes sense, unlike Apple's stories of being "forced" into accepting money for exclusivity.

That's like saying poor old AT&T was "forced" into exclusivity with the iPhone for years

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As for the EU, they give these huge penalties because it's easy money for them. Just ask Apple about the $15 billion in penalties they're paying over there because of tax changes.

 

[tongxinshe]

Qualcomm has superior chips compared to rivals. Who in the right mind will use slower chips?

No one’s first iteration of product is perfect.

 

[Mirice99]

No one’s first iteration of product is perfect.

That should be Apple's new slogan Instead of "it just works".

 

[tongxinshe]

That should be Apple's new slogan Instead of "it just works".

Jumping topic how fast! We are talking about Intel chip here.