Qualcomm rises after winning appeal over $1B fine from EU (NASDAQ:QCOM) – Seeking Alpha

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Qualcomm (NASDAQ:QCOM) has won its appeal against a $1.05B fine that was imposed on it by European Union regulators after Europe’s second-highest court sided with the San Diego-based chipmaker.

In 2018, the European Commission said that Qualcomm’s (QCOM) decision to pay billions of dollars to Apple (NASDAQ:AAPL) to exclusively use its baseband chips in iPhones and iPads from 2011 to 2016 was an abuse of power. However, the General Court annulled the finding and said there were “a number of procedural irregularities” that impacted Qualcomm’s right of defense.

“As regards the failure to have due regard for Qualcomm’s rights of defense, the General Court finds that the Commission committed a number of irregularities when it was putting together the case-file,” the statement read.

“The General Court points out that it is for the Commission to record, in the form of its choosing, the precise content of all interviews conducted for the purposes of collecting information relating to the subject matter of an investigation,” the statement added. “In the present case, the Commission failed to respect that obligation fully so far as concerns, in particular, the holding of meetings and conference calls with third parties.”

Qualcomm (QCOM) shares rose fractionally to $130.64 in premarket trading on Wednesday.

The court added that the EU’s conclusion that Qualcomm’s (QCOM) payments to Apple (AAPL) to reduce its incentive to switch to competitors was not correct, as “Apple had had no technical alternative to Qualcomm’s LTE chipsets for the majority of its requirements during the period concerned.”

The EU is eligible to appeal the case to the highest court of law, the EU Court of Justice.

The European Commission said it would study the decision of the General Court and discuss its next steps, according to Reuters.

On Monday, Qualcomm (QCOM) closed its acquisition of Israeli-based 5G mobile network automation company, Cellwize.