The United States Federal Trade Commission today filed a complaint against Qualcomm, accusing the company of violating the FTC Act by using anticompetitive tactics to remain the dominant supplier of baseband processors (aka LTE chips) for smartphones.
According to the FTC, Qualcomm uses its position and its portfolio of patents to impose “onerous and anticompetitive supply and licensing terms on cell phone manufacturers,” negatively impacting its competitors.
The complaint specifically addresses a deal with Apple in which Qualcomm required Apple to exclusively use its modems from 2011 to 2016 in exchange for lower patent royalties.
Qualcomm precluded Apple from sourcing baseband processors from Qualcomm’s competitors from 2011 to 2016. Qualcomm recognized that any competitor that won Apple’s business would become stronger, and used exclusivity to prevent Apple from working with and improving the effectiveness of Qualcomm’s competitors.
Up until 2016, Apple only used Qualcomm modems in its line of iPhones, deviating from the norm with the iPhone 7. Both Intel and Qualcomm modems were adopted for the iPhone 7 and the iPhone 7 Plus, leading to some compatibility and performance discrepancies.
Qualcomm is also accused of refusing to license its standard-essential patents to competing suppliers and implementing a “no license, no chips” tax policy where it supplies its baseband processors only when manufacturers agree to Qualcomm’s preferred licensing terms, causing smartphone makers to pay higher royalties to Qualcomm when a competitor’s modem chips are used.
The FTC has asked the court to order Qualcomm to put a stop to its anticompetitive conduct and take action to “restore competitive conditions.”
Tags: FTC, Qualcomm
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