Qualcomm spars with EU antitrust regulators over Huawei, ZTE rebates

Qualcomm (QCOM.O) on Tuesday criticized European Union antitrust regulators over their definition of rebates given to Chinese phone makers Huawei and ZTE in the second day of a court hearing aimed at overturning a 242-million-euro ($259 million) fine.

The US chipmaker is pleading its case in the General Court, Europe's second-highest, after winning its fight to overturn a 997-million-euro EU antitrust fine in another case there last year

 

The European Commission handed Qualcomm the fine in 2019, alleging it had engaged in predatory pricing by selling its chipsets for mobile internet dongles at below cost between 2009 and 2011 to thwart British phone software maker Icera, now part of Nvidia Corp (NVDA.O).

The EU competition enforcer said an analysis of Qualcomm's prices showed it sold some of its chips below cost to Huawei (HWT.UL) and ZTE (000063.SZ), with rebates and discounts driving the final prices down.

 

Qualcomm's lawyer rebuffed the analysis on the second day of a three-day hearing.

"The Commission should have applied the price cost test over a longer, more meaningful period. Had the Commission made those two simple corrections, you would have found no predation," Athina Kontasakou told the court.

She said the Commission was wrong to treat annual lump-sum payments made by Qualcomm to customers as hidden discounts and rebate payments.

 

Martin Farley, a lawyer for the Commission, defended its analysis of Qualcomm's prices as "fundamentally correct and robust".

"All of the decisions that the Commission took in exercise of its discretion to calculate the costs were done to ensure that they reflected reality," he told judges.

The court will rule in the coming months. The case is T-671/19 Qualcomm v Commission.