Apple and Qualcomm may have dropped their worldwide lawsuit war against each other, but that wasn’t the only battle Qualcomm faced. The FTC also brought a case against Qualcomm, alleging antitrust abuses and illegal behavior. In a ruling May 21, US District Court Judge Lucy Koh found that Qualcomm had violated the Federal Trade Commission Act. Qualcomm has pledged to immediately appeal the ruling, which has significant implications for its business structure and earnings.
“We strongly disagree with the judge’s conclusions, her interpretation of the facts and her application of the law,” Don Rosenberg, executive vice president and general counsel of Qualcomm, said in a statement Wednesday.
Judge Koh largely sided with the FTC’s findings and arguments and has hit Qualcomm with multiple requirements. One of the major findings is that Qualcomm is not allowed to use its “no license, no chips” strategy that required customers to license Qualcomm patents in order to purchase its microprocessors. The company is also prohibited from striking exclusivity deals with companies like Apple, and from refusing to license its patents according to FRAND (Fair, Reasonable, and Non-Discriminatory) terms.
“Qualcomm’s licensing practices have strangled competition in the CDMA and premium LTE modem chip markets for years, and harmed rivals, OEMs, and end consumers in the process,” Koh writes.
Qualcomm was found to have made exclusivity deals with Apple, Blackberry, LGE, Samsung, and Vivo. It interfered with regulator investigations when it paid Samsung $100M to shut that company up over supposed antitrust violations. Koh noted that Qualcomm has a history of misbehavior, noting: “Qualcomm’s failure to alter its unlawful licensing practices despite years of foreign government investigations, findings, and fines suggests an obstinance that a monitoring provision may address.”
The latest episode in the years-long legal drama between Qualcomm and Apple was unveiled today, when CNBC's David Faber reported that Qualcomm has lobbed "explosive" charges against Apple for stealing "vast swaths" of its confidential information and trade secrets for the purpose of improving the performance of chip sets provided by Qualcomm competitor Intel, according to a filing with the Superior Court of California.
EU competition regulators today slapped a €997m fine on US chipmaker Qualcomm for paying Apple so that the iPhone maker only used its chips, blocking rivals such as Intel. The European Commission said its investigation, launched in 2015, covered the period from 2011 to 2016. The Commission said the probe took into account Qualcomm's market dominance in LTE baseband chipsets, which enable rapid 4G mobile connections. "Qualcomm paid billions of US dollars to a key customer, Apple, so that it would not buy from rivals," European Competition Commissioner Margrethe Vestager said in a statement.
Our IP Address: