Case C-819/24 P, Qualcomm v Commission – the cost of selling below cost
Predatory pricing is the abuse the Court defined in 1991 and has rarely revisited. Qualcomm’s appeal asks it to say what the definition requires in a market where the product changes every year and the cost of making it is mostly the cost of designing it.
Facts
By Decision C(2019) 5361 of 18 July 2019 in Case AT.39711 the Commission found that Qualcomm had abused a dominant position in the market for UMTS baseband chipsets by supplying certain chipsets to Huawei and ZTE at prices below cost between 1 July 2009 and 30 June 2011, with the intention of eliminating Icera, a rival later acquired by Nvidia, whose complaint had started the investigation. The fine was EUR 242 042 000. On 18 September 2024 the General Court (First Chamber, Extended Composition) annulled Article 2 of the decision — the fine — and, exercising its unlimited jurisdiction, set it at EUR 238 732 659.33, dismissing the action as to the remainder (Case T‑671/19, ECLI:EU:T:2024:626). Qualcomm appeals on seven pleas, seeking annulment of the decision in full.
Grounds of Appeal
According to the Official Journal notice, the appellant asks the Court to set aside the judgment, annul the decision, or in the alternative refer the case back, and to order the Commission to pay the costs of both proceedings.
First Plea: In dismissing the First Plea, the General Court commits errors of law by misapplying EU case law, relying on inadequate reasoning, distorting the clear sense of the evidence and failing to engage with arguments put forward by the Appellant.
Second Plea: In dismissing the Second Plea, the General Court commits errors of law by misapplying EU case law, relying on inadequate reasoning, distorting the clear sense of the evidence and failing to engage with arguments put forward by the Appellant.
Third Plea: The Judgment errs in law by dismissing the Third, Fourth, Ninth, and Eleventh Pleas, errs in finding that the Decision conducted an AEC analysis and that it correctly established the alleged abuse, errs in dismissing as ineffective Qualcomm’s arguments, fails to examine all relevant circumstances, and is insufficiently reasoned.
Fourth Plea: In dismissing Qualcomm’s arguments regarding the Decision’s price restatement, the General Court errs in law, misunderstands and/or distorts the facts, and fails to engage with Qualcomm’s arguments.
Fifth Plea: By upholding the Decision’s erroneous allocation of non-recurring engineering expenses, the Judgment commits errors of law, fails to engage with Qualcomm’s arguments, distorts the evidence, and fails to provide adequate reasoning.
Sixth Plea: By upholding the Decision’s erroneous calculation of costs, the Judgment commits manifest errors of law, fails to engage with Qualcomm’s arguments, distorts the evidence, and fails to provide adequate reasoning.
Seventh Plea: In dismissing the Tenth Plea, the General Court commits manifest errors of law, fails to consider all relevant evidentiary elements, misconstrues and misapplies EU case law, fails to provide adequate reasoning, and impermissibly substitutes its own reasoning for that of the EC.
Sources
OJ notice C/2025/2349 (EUR‑Lex) · Case file on CURIA · Judgment under appeal, T‑671/19 (ECLI:EU:T:2024:626)
Comment
The notice is drafted in the flattest register the Court’s appeals ever see — the first two pleas do not even say what they are about — and the substance has to be read from the General Court’s own headnote, which lists what was fought over: “Reconstruction of prices – Determining the cost benchmark – Price-cost test – No requirement to demonstrate the existence of actual effects – Intention to eliminate a competitor”. Those five phrases are the appeal.
The doctrinal core is still Case C‑62/86, AKZO (ECLI:EU:C:1991:286): prices below average variable cost are presumed abusive, prices between average variable and average total cost are abusive if part of a plan to eliminate a competitor. That test was built for chemicals. Qualcomm’s fifth and sixth pleas attack how it was applied to semiconductors, where the decisive cost is not what it takes to make a chip but what it took to design it — “non-recurring engineering expenses” — and how those are allocated across products decides on which side of the line a price falls. The fourth plea, on “price restatement”, concerns the Commission’s reconstruction of what Qualcomm actually charged once rebates and other terms are netted off. None of this is glamorous, but it is where predation cases are won and lost, and the Court has never had to rule on how AKZO’s cost benchmarks work for a product whose marginal cost is close to zero.
The third plea raises the question with the longest reach. Qualcomm says the Commission never performed a genuine as-efficient-competitor analysis and that the General Court was wrong to hold that actual effects need not be shown. Since Case C‑413/14 P, Intel (ECLI:EU:C:2017:632) the Court has insisted that where the Commission engages with the capacity of conduct to foreclose, its analysis must be examined in full; and since Case C‑209/10, Post Danmark (ECLI:EU:C:2012:172) it has said that pricing above average incremental cost is not, without more, exclusionary. The Commission’s position is that predation, like the rebates in Intel before the 2017 judgment, carries its own presumption of harm. Whether the effects-based turn in Article 102 case law now reaches pricing below cost — the one abuse where the Court’s original test was expressly presumption-based — is what the Court will have to decide, and the answer will apply well beyond chipsets.
A note on timing. The appeal was lodged in November 2024 and no Advocate General’s Opinion has yet appeared; the conduct dates from 2009–2011 and the complainant no longer exists as an independent company. The Court will be ruling, in 2027 or later, on a two-year pricing episode from the era of the first smartphones. That is not a reason to discount the judgment — the legal questions are live — but it is a reminder of how far behind the market Article 102 enforcement runs.