4 ms·

>How do you structure an agreement to be even a tiny bit plausible? They don't have to. They do whatever the hell they want and know they'll have to pay some t

by Joe-Z 9y ago

>How do you structure an agreement to be even a tiny bit plausible? They don't have to. They do whatever the hell they want and know they'll have to pay some tiny amount of their exorbitant profits to the EU for it. And even that they try to drag out as long as possible. (The article also mentioned Intel dragging out paying a fine for 9 years now) I'm pretty sure these sorts of fines are already factored into their business plan.

shakna 9y ago
The fine against Qualcomm is $1.23 billion. Qualcomm reported a revenue of $6.2 billion in 2017 [0]. Taking a fine worth 1/6th of your annual revenue is not insignificant. [0] https://9to5mac.com/2017/11/01/qualcomm-earnings-slump-on-apple-battle/ https://9to5mac.com/2017/11/01/qualcomm-earnings-slump-on-ap...
- zaroth 9y ago
  That’s quarterly revenue. But if anyone thinks the Board of a company is figuring $1.2B is just the cost of doing business / worth the risk of making the payments to Apple I think they are talking out their ass. Even a trillion dollar company is going to care deeply about a $1.2B fine. Companies care about fractions of a percent of operating margin. What do you think a $1.2 billion dollar expense line item, which also probably isn’t deductible, does to their margin? This is a highly material fine.
  - post_break 9y ago
    Maybe they are playing the long game? If everyone uses qualcomm chips then the competition will be little to none. Sure 1.2B is a big number, but after that gets paid you're still on top. They basically gambled for 5 years and won, then the house took a little back.
- MagnumOpus 9y ago
  The actual numbers: - Fiscal year 2017 revenue was $23.2 billion - Fiscal year 2017 pre-tax profit was $7.5 billion 1/6 of a single year's profits for a practice that cemented their dominant market position for 6-7 years is not punitive.
  - raphaelj 9y ago
    Yes, but the fine should only cover Qualcomm's EU activities. EU account for about 15% of the smartphone market sales, so it's more like one year worth or EU profits.
  - detuur 9y ago
    Do note, this is only a punitive fine. The fine is limited to 4% of annual revenue (afaik), but it is a regulatory acknowledgement of wrongdoing. The fact that this fine is at the near maximum of the limit also cements the idea that this was a grave violation. This opens up the door to lawsuits from competitors, which can impose damages which are much, much greater, which in my knowledge aren't limited by revenue and can easily exceed all the money a company has ever made. This is the sort of stuff that can kill your business. Qualcomm has to tread very carefully now.

by Joe-Z 9y ago

shakna 9y ago

The fine against Qualcomm is $1.23 billion. Qualcomm reported a revenue of $6.2 billion in 2017 [0]. Taking a fine worth 1/6th of your annual revenue is not insignificant. [0] https://9to5mac.com/2017/11/01/qualcomm-earnings-slump-on-apple-battle/ https://9to5mac.com/2017/11/01/qualcomm-earnings-slump-on-ap...

zaroth 9y ago
That’s quarterly revenue. But if anyone thinks the Board of a company is figuring $1.2B is just the cost of doing business / worth the risk of making the payments to Apple I think they are talking out their ass. Even a trillion dollar company is going to care deeply about a $1.2B fine. Companies care about fractions of a percent of operating margin. What do you think a $1.2 billion dollar expense line item, which also probably isn’t deductible, does to their margin? This is a highly material fine.
- post_break 9y ago
  Maybe they are playing the long game? If everyone uses qualcomm chips then the competition will be little to none. Sure 1.2B is a big number, but after that gets paid you're still on top. They basically gambled for 5 years and won, then the house took a little back.
MagnumOpus 9y ago
The actual numbers: - Fiscal year 2017 revenue was $23.2 billion - Fiscal year 2017 pre-tax profit was $7.5 billion 1/6 of a single year's profits for a practice that cemented their dominant market position for 6-7 years is not punitive.
- raphaelj 9y ago
  Yes, but the fine should only cover Qualcomm's EU activities. EU account for about 15% of the smartphone market sales, so it's more like one year worth or EU profits.
- detuur 9y ago
  Do note, this is only a punitive fine. The fine is limited to 4% of annual revenue (afaik), but it is a regulatory acknowledgement of wrongdoing. The fact that this fine is at the near maximum of the limit also cements the idea that this was a grave violation. This opens up the door to lawsuits from competitors, which can impose damages which are much, much greater, which in my knowledge aren't limited by revenue and can easily exceed all the money a company has ever made. This is the sort of stuff that can kill your business. Qualcomm has to tread very carefully now.