Regulators just hammered a key iPhone supplier for bribing Apple

The European Union's regulator has ordered Qualcomm to pay a fine of 997.4 million euros ($1.24 billion) for paying Apple to keep using its chips in its iPhone smartphones.

The U.S. semiconductor giant essentially showered Apple with money, starting in 2011 and ending in 2016, to keep the company from using a competitor's LTE baseband chip in its phones. This meant that Intel and other companies who tried to bid for Apple's business in this area were essentially shut off from doing so.

"Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance. Qualcomm paid billions of U.S. Dollars to a key customer, Apple, so that it would not buy from rivals. (...) This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were," the European Commissioner for Competition Margrethe Vestager said in a statement Wednesday.

She also tweeted a simple message for any company thinking of doing something similar: "Don't."

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This is not the first such fine for Qualcomm, but it is the biggest. In Feb. 2015, China fined the company $975 million for abusing its dominant market position. In addition to being huge, the fine comes at a particularly bad time for Qualcomm, which is trying to avoid a hostile takeover by Broadcom and is being sued by Apple over patent royalty payments.

This might not be the end of Qualcomm's problems. A second EU antitrust probe is looking into whether Qualcomm sold dongle chipset below cost from 2009 to 2011 to stifle competition from rival company Icera.

Qualcomm issued a statement following the decision, saying it would appeal the decision to the General Court of the European Union. “We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers,” said Don Rosenberg, executive vice president and general counsel of Qualcomm.

Though this may sound odd, the EU does not consider Apple to be guilty of any wrongdoing in this case. According to Bloomberg, Vestager said this case is about Qualcomm and that there's no evidence of wrongdoing from Apple.