FTC Accuses Qualcomm of Anticompetitive Behavior

Posted by at 10:31 am on January 18, 2017

The U.S. Federal Trade Commission today filed a complaint against Qualcomm, alleging the chip-maker uses its market position to monopolize the sale of cell phone baseband processors.

The FTC says Qualcomm is violating the FTC Act in several ways. First, Qualcomm refuses to license standard-essential patents to competitors even though it has committed to do so. Second, Qualcomm won’t sell its baseband processors to customers unless they agree to Qualcomm’s licensing terms. The FTC says this “no license, no chips” policy leads to elevated royalties.

Last, Qualcomm offered Apple reduced patent royalties in exchange for exclusively using Qualcomm baseband processors for a period of 5 years. The FTC hopes a court order will force Qualcomm to cease its anticompetitive behavior and prevent further unfair business practices.

“By excluding competitors, Qualcomm impedes innovation that would offer significant consumer benefits, including those that foster the increased interconnectivity of consumer products, vehicles, buildings, and the Internet of Things,” said the government.

Qualcomm did not immediately respond to the FTC’s action. Qualcomm recently ran into similar legal trouble in South Korea, which fined the chip maker nearly $900 million over its anticompetitive business practices. Qualcomm has already settled with China and the European Union over similar charges.

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