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Qualcomm was fined €242 million ($272 million) on Thursday by European Union antitrust regulators, for predatory pricing in the chipset market. The European Commission found that the company sold its products below cost in order to drive a competitor out of the market.

The ruling marks the second time European regulators have fined Qualcomm. Last year, the company was ordered to pay €997 million ($1.1 billion) for paying Apple to use only its chips in iPhones – a tactic aimed at thwarting rivals.

Thursday's fine was 1.27% of Qualcomm's revenue last year and "aimed at deterring market players" from trying the same thing, the EU said.

Margrethe Vestager, the EU's antitrust chief, said in a statement that Qualcomm sold chipsets, which are key components that enable mobile devices to connect to the internet, below cost to key customers, with the intention of eliminating a competitor.

"Qualcomm's strategic behaviour prevented competition and innovation in this market, and limited the choice available to consumers in a sector with huge demand and potential for innovative technologies," she said.

Qualcomm said it would appeal the Commission's decision. "On appeal, we will expose the meritless nature of this decision," Qualcomm executive vice-president and general counsel Don Rosenberg said in a statement.

The Commission found that Qualcomm abused its dominant position in the market for 3G baseband chipsets, by selling some of its products below the cost of production to handset makers Huawei and  ZTE. Qualcomm did this in order to eliminate Icera, its main rival in that market segment, the Commission said.

The investigation found that Qualcomm's market share of the baseband chipset market was approximately 60% – almost three times that of its biggest competitor.

Based on a price-cost test and a range of evidence about the state of the market, the Commission concluded that Qualcomm's action had been targeted to maximise the impact on Icera's business while minimising the effect on its own revenues.

This prevented Icera from competing in the market, stifled innovation and ultimately reduced choice for consumers, the Commission said.

In May 2011, Icera was acquired by U.S. tech company Nvidia, which decided to wind down its baseband chipset business line in 2015.

Qualcomm's Rosenberg said in the company's statement that the Commission's decision was "unsupported by the law, economic principles or market facts". He said the company expects the decision to be reversed on appeal.

The two customers the Commission investigated said they favoured Qualcomm's chips "not because of price but because rival chipsets were technologically inferior", he said, adding that the decision was based on a "novel theory of alleged below-cost pricing over a very short time period and for a very small volume of chips".

"There is no precedent for this theory, which is inconsistent with well-developed economic analysis of cost recovery, as well as Commission practice," Rosenberg said.

In 2009, the Commission also fined chipmaker Intel for anti-competitive practices in the chipset market. The biggest ever antitrust fine imposed by the Commission was a €2.4 billion ($2.7 billion) sanction levied on Google in 2017 for favouring its Google Shopping service in online search results.