On April 9, 2019, the General Court dismissed Qualcomm’s application for annulment of a Commission decision of March 31, 2017, requiring Qualcomm to provide information in the context of an antitrust probe.[1]
The Commission sent a Statement of Objections (“SO”) to Qualcomm in December 2015, in which it took the preliminary view that Qualcomm had engaged in predatory pricing by selling its baseband chipset products below cost to two of its key customers (Huawei and ZTE) in an effort to eliminate its competitor Icera, and thereby abused its dominant position in the market for UMTS- compliant baseband chipsets in violation of Article 102 TFEU. Following Qualcomm’s response to the SO and an oral hearing, the Commission sent Qualcomm an information request with 4 weeks to respond. Qualcomm perceived the request as overly broad and burdensome, and tried to persuade the Commission to limit the scope and explain the precise subject matter of its investigation, citing practical difficulties in complying. The Commission refused to do so and adopted a legally binding decision (the “Decision”) forcing Qualcomm to comply with the request within 8 weeks or pay a daily penalty of €580,000. Following a back-and-forth with the Commission and Hearing Officer on extensions, submissions of partial responses, follow-up requests from the Commission, and a concurrent and unsuccessful attempt to suspend the Decision (alternatively the periodic penalty payment) through a request for interim measures to the General Court, Qualcomm sought an annulment of the Decision by the General Court.
Qualcomm relied on a number of arguments in support of its application, including an infringement of (i) the principles of necessity, proportionality, and good administration, (ii) the obligation to state reasons, (iii) a reversal of the burden of proof, and (iv) the right to avoid self-incrimination.[2] The General Court rejected each of Qualcomm’s arguments. In particular, the General Court held that while the Commission was indeed obliged to explain the purpose of its request and the subject matter of its investigation,[3] it was not obliged to disclose all of the information at its disposal.[4] The General Court also noted that issuing an information request following an SO does not render the request unlawful or unnecessary,[5] to the extent that the Commission allows the addressee to exercise its right to be heard.[6] As to proportionality, the General Court reasoned that the complicated nature of a predatory pricing investigation—which requires assessment of a large amount of data—coupled with the resources at Qualcomm’s disposal, rendered the request proportionate.[7] The General Court also found that Qualcomm had failed to establish prosecutorial bias on the part of the Commission.[8] Qualcomm is not the first company to challenge a Commission information request. In 2016, the Court of Justice annulled a Commission decision in which it requested information from a number of cement manufacturers for failing to explain the underlying allegations.[9]
As confirmed by the General Court, the Commission did not make the same mistake with respect to Qualcomm. Qualcomm’s efforts to object on the basis of practical difficulties were largely dismissed by both the Commission and the General Court, which shows that beyond possible deadline extensions, similar claims are unlikely to succeed in the future.
[1] Qualcomm v. Commission (Case-T‑371/17) EU:T:2019:232.
[2] Ibid., para. 28.
[3] Ibid., paras. 44–46.
[4] Ibid., para. 41.
[5] Ibid., para. 69.
[6] Ibid., paras. 79 and 99.
[7] Ibid., para. 123.
[8] Ibid., para. 202.
[9] HeidelbergCement AG v. Commission (Case C-247/14 P) EU:C:2016:149; Schwenk Zement KG v. Commission (Case C-248/14 P) EU:C:2016:150; Buzzi Unicem SpA v. Commission (Case C-267/14 P) EU:C:2016:151; Italmobiliare SpA v. Commission, (Case C-268/14 P) EU:C:2016:152.