On Tuesday, the Federal Trade Commission filed a lawsuit against Qualcomm for anti-trust violations. Three days later, Apple also filed a lawsuit against the mobile chip giant overcharging “excessive royalties” and withholding payment. The FTC alleged Qualcomm of using anticompetitive practices to maintain a monopoly on a critical semiconductor used in cellular devices, while Apple seeks $1 billion in rebate payments.
The FTC accused Qualcomm of charging Apple an unfair amount to license its cellular patents. According to the suit, Qualcomm had used its monopoly position in the market to force “onerous and competitive supply and licensing terms.” The FTC’s complaint against Qualcomm also states that it “maintains a ‘no license, no chips’ policy under which it will supply its baseband processors only on the condition that cellphone manufacturers agree to Qualcomm’s preferred license terms.”
Apple agreed in its lawsuit that Qualcomm has a monopoly on mobile chips that can support CDMA interfaces, used by networks like Verizon and Sprint. Apple added that Qualcomm “has unfairly insisted on charging royalties for technologies they have nothing to do with.”
Stacy Rasgon, senior analyst at Bernstein Research, said, “It looks like Qualcomm’s business is now under attack from all fronts. It’s not just from the government but from its largest customers now.” The chip supplier has faced allegations from other countries too; South Korea fined Qualcomm $890 million last month for forcing phone manufacturers to sign unfair patent licensing agreements in order to gain access to its modem chips. Apple accused Qualcomm of withholding payments in response to Apple’s cooperation with South Korean regulators investigating the company in question.
Apple seeks $1 billion in rebate payments it claims has been wrongfully withheld “for responding truthfully to law enforcement agencies investigating them,”, according to a statement.
Qualcomm has denied the charges levied by Apple, claiming various regulatory bodies have encouraged Apple to attack it. Don Rosenberg, general counsel for Qualcomm wrote in a statement that the claims are “baseless”.
“We welcome the opportunity to have these have these meritless claims heard in court,” the statement continues, “where we will be entitled to full discovery of Apple’s practices and a robust examination of the merits.”
