On June 15, 2022, the General Court annulled the Commission’s decision and corresponding fine of €997 million in the Qualcomm case due to procedural violations and a flawed substantive assessment. The General Court first found that the Commission had infringed Qualcomm’s rights of defense by failing to properly inform Qualcomm of meetings with third parties, and failing to hear Qualcomm on the consequences of substantial changes between the Statement of Objections (“SO”) and the final decision. Second, the General Court found that the Commission’s analysis of anticompetitive effects was flawed in that it did not take into account all relevant factual circumstances and did not support its findings.
On January 24, 2018, the Commission found that Qualcomm had abused its dominant position in the global market for LTE baseband chipsets between 2011 and 2016. The infringement started when Qualcomm entered into a supply agreement with Apple that included exclusivity payments which, in the Commission’s view, were capable of having anticompetitive effects because they reduced Apple’s incentive to switch to other chipset suppliers. The Commission’s assessment took into account, in particular, the extent of Qualcomm’s dominant position, the share of the market covered by the exclusivity payments, their conditions, arrangements, duration and amount, the importance of Apple as a customer, and the absence of efficiencies justifying the payments.
Infringement of Qualcomm’s rights of defense
In its appeal, Qualcomm argued that the Commission had infringed its rights of defense by committing manifest procedural errors. In particular, Qualcomm claimed that the Commission had: (i) failed to disclose to Qualcomm evidence relevant to its defense; and (ii) deprived it of the opportunity to comment on important aspects of the decision.
Failure to disclose relevant evidence
Qualcomm complained that the case file lacked notes and information concerning the content of meetings and conference calls between the Commission and third parties (seven in total, some of which Qualcomm was only informed of after the decision). For some of these meetings, the Commission shared “succinct” notes with Qualcomm after the decision. Qualcomm claimed that these notes were inappropriate and meaningless because they did not inform it of the content of the discussions held during the meetings. For other meetings, the Commission was not able to share any notes with Qualcomm because they did not exist.
The General Court found that the purpose of the meetings was to collect information relating to the subject matter of the investigation that led to the adoption of the decision. Therefore, these meetings fell within the scope of Article 19 of Regulation 1/2003 and the Commission should have properly recorded them to be able to provide information on the content of the discussions and indicate the information gathered.
In the case at hand, the notes that the Commission shared with Qualcomm failed to meet that standard because they only contained a “very general indication” of the topics discussed. In light of the specific circumstances of the case, the General Court found that Qualcomm would have been able to better ensure its defense had the Commission taken and shared proper notes of these meetings. Because the outcome of the procedure could have been different absent this procedural error, the General Court held that the Commission had infringed Qualcomm’s rights of defense.
Denied opportunity to comment on the revised scope of the SO
Separately, Qualcomm argued that the Commission had infringed its rights of defense by failing to let it express its views on key differences between the SO and the decision. In particular, while the SO concerned two chipsets markets, the final decision only concerned the LTE chipsets market. While the General Court acknowledged that the SO is a preparatory procedural measure from which the final decision may differ, it added that the alteration in the scope of the alleged abuse had an effect on the relevance of the data and essential parameters underlying Qualcomm’s “critical margin analysis.” Therefore, the Commission could not base its decision on this analysis without allowing Qualcomm to express its views on the consequences of this change and, where appropriate, letting it revise its economic analysis. By doing so, the Commission infringed Qualcomm’s rights of defense.
In addition to these procedural violations, Qualcomm claimed that the Commission had erred in concluding that its payments to Apple were capable of having anticompetitive effects.
The General Court found that the Commission’s substantive assessment was flawed in several aspects, one of which was the Commission’s failure to take into account that Qualcomm was the only chipset supplier that met Apple’s technical requirements for most iPhone devices. Apple had no technical alternative to Qualcomm’s LTE chipsets (i.e., no ability to switch to another supplier) for most of its products, regardless of any incentive payments. Therefore, Qualcomm’s payments could not have affected its incentives to switch.
The General Court thus concluded that the Commission had failed to carry out its analysis in the light of all relevant factual circumstances of the case, and that it had erred in finding that Qualcomm’s payments had reduced Apple’s incentives to switch to competing chipsets suppliers. These shortcomings were not remedied by the Commission’s analysis concerning Apple’s incentives to switch for certain iPad models, which the General Court found incapable of supporting the Commission’s findings in any case.
This judgment underlines how important it is for the Commission to respect fundamental procedural rights in antitrust investigations. Specifically, the judgment: (i) emphasizes the Commission’s duty to take proper notes during meetings discussing information potentially relevant to an undertaking’s defense; and (ii) clarifies that where changes occur to the scope of its objections after the SO, which affect the relevance of the data on the basis of which the effects of the investigated conduct have been challenged, the Commission must give the undertaking concerned the opportunity to be heard and, if necessary, adapt its analysis.
Though it could have annulled the Commission’s decision on procedural grounds alone, the General Court dedicated almost a third of its judgment to a review of its effects-based analysis. This sends a strong signal about the General Court’s approach to reviewing the Commission’s economic analysis following the Intel case earlier this year. There too, the General Court conducted a strict review of the Commission’s analysis of anticompetitive effects, concluding that it was incomplete and did not meet the required legal standard to show potential anticompetitive effects. Qualcomm confirms and corroborates this trend, holding the Commission to a more rigorous approach in future cases where companies object to the characterization of the practices at issue as being capable of having anticompetitive effects.
 Qualcomm v. Commission (Case T-235/18) EU:T:2022:358.
 Baseband chipsets enable smartphones and tablets to connect to cellular networks and are used for both voice and data transmission. LTE baseband chipsets comply with the 4G Long-Term Evolution (“LTE”) standard.
 Qualcomm (exclusivity payments) (Case COMP/AT.40220), Commission decision of January 24, 2018.
 Under these arrangements, Apple committed to obtain LTE chipsets exclusively from Qualcomm in exchange for incentive payments.
 The amount of the payments, as reported in the Commission’s decision, was of c. $2–3 billion in total. See Qualcomm (exclusivity payments) (Case COMP/ AT.40220), Commission decision of January 24, 2018, para. 172.
 In particular, the Commission found that Apple was “an attractive customer for LTE chipset suppliers because of its importance for entry or expansion in the worldwide market for LTE chipsets”. Ibid., para. 410.
 Council Regulation (EC) No. 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ 2003 L 1/18.
 Qualcomm v. Commission (Case T-235/18) EU:T:2022:358, para. 190.
 Ibid., para. 191.
 This analysis aimed to demonstrate that the exclusivity payments were not capable of having foreclosure effects.
 Other criticisms included, for example, the Commission’s failure to take into account relevant evidence, and reliance on evidence that lacked consistency and was not capable of substantiating its conclusions.