FTC sues Qualcomm over licensing practices

US regulators allege Qualcomm used its power in the market to impose unfair licensing terms.

(Image: file photo)

Qualcomm used anticompetitive tactics to maintain a monopoly over semiconductor supply, the Federal Trade Commission alleged in a complaint on Tuesday.

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By using its power over the market, the FTC said Qualcomm imposed anticompetitive supply and licensing terms on smartphone manufacturers for profit and to weaken competitors. If manufacturers don't agree to Qualcomm's conditions, they don't have access to crucial cellular tech.

The FTC has asked courts to order Qualcomm to cease its anticompetitive conduct and take actions to restore competitive conditions. Qualcomm disclosed in 2014 the FTC was looking into its licensing practices.

The complaint alleges that Qualcomm:

  • Maintains a "no license, no chips" policy under which it will supply its baseband processors only on the condition that cell phone manufacturers agree to Qualcomm's preferred license terms.
  • Refuses to license standard-essential patents to competitors.
  • Extracted exclusivity from Apple in exchange for reduced patent royalties. The Feds claim this prevented Apple from moving to one of Qualcomm's competitors.

These aren't the first anti-trust issues for Qualcomm. South Korea-based regulators fined Qualcomm $890 million for monopolistic practices in December, and Taiwanese officials have begun to snoop around as well.

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