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US Antitrust Agency Sues Qualcomm Over Patent Licensing (reuters.com)

Posted by BeauHD on from the anti-competitive dept.

Qualcomm shares have plunged after the U.S. Federal Trade Commission filed a lawsuit against the company on Tuesday, accusing the company of using "anticompetitive" tactics to maintain its monopoly on a key semiconductor used in mobile phones. Reuters reports: The FTC, which works with the Justice Department to enforce antitrust law, said that San Diego-based Qualcomm used its dominant position as a supplier of certain phone chips to impose "onerous" supply and licensing terms on cellphone manufacturers and to weaken competitors. Qualcomm said in a statement that it would "vigorously contest" the complaint and denied FTC allegations that it threatened to withhold chips in order to collect unreasonable licensing fees. In its complaint, the FTC said the patents that Qualcomm sought to license are standard essential patents, which means that the industry uses them widely and they are supposed to be licensed on fair, reasonable and non-discriminatory terms. The FTC complaint also accused Qualcomm of refusing to license some standard essential patents to rival chipmakers, and of entering into an exclusive deal with Apple Inc. The FTC asked the U.S. District Court for the Northern District of California in San Jose to order Qualcomm to end these practices.

2 of 71 comments (clear)

  1. But the Qualcomm product is worth it by RubberDogBone · · Score: 1, Interesting

    The thing is, the Qualcomm product is demonstrably better than the competing options. It's not even close. As a user, I don't give a care if they strongarm Apple or Samsung or other companies and force them to pay more. What I want is the best performing phone I can get and I don't want excuses that some company opted for an alternative that stinks.

    We can see that right now with the intel chipset iPhones falling flat on their faces compared to the superior Qualcomm iPhones. There. THAT is why I want Qualcomm in my phones. They know this stuff better than anyone and it works and runs rings around even supposed experts like intel.

    Since I cannot just replace the chips and modems in my phone, I need this to all happen as the phones are designed and made and if it costs Apple or Samsung more, so what? Add a dollar to the price of the damn phone so I don't have to be stuck with a junk modem for years and years.

    Come on! PAY the premium! I for one would pay Qualcomm directly if I could. I can't. So it's up to the phone makers to do it for me. The FTC can stuff it. If they turn around and force Apple to offer iPhones with a Realtek chipset or some such junk, it's going to damage Apple and I promise I will sledgehammer such a phone rather than use it.

    --
    Sig for hire.
    1. Re:But the Qualcomm product is worth it by Anonymous Coward · · Score: 3, Interesting

      > The thing is, the Qualcomm product is demonstrably better than the competing options. It's not even close. ... We can see that right now with the intel chipset iPhones falling flat on their faces compared to the superior Qualcomm iPhones.

      You ever think that maybe could be because of "Qualcomm us[ing] its dominant position as a supplier of certain phone chips to impose "onerous" supply and licensing terms on cellphone manufacturers and to weaken competitors." as well as "Qualcomm['s refusal] to license some standard essential patents to rival chipmakers[.]"?

      There was a time when you'd pretty much _never_ find an AMD chip in a machine from the Big PC Manufacturers. Not even when AMD (or other manufacturers) had _demonstrably_ superior silicon. And the only PCs with "off-brand" chips you _could_ find were _vastly_ inferior to the Intel versions. Why? Because (as was proven by FedGov) Intel used backroom deals and strong-arm tactics to engage in illegal, anticompetitive behavior which flat-out killed many CPU manufacturers and (for a very long time) kept the prices of CPUs really high, and their performance relatively low. Were it not for FedGov action, Intel would be the _only_ game in town, and you'd be paying $1000 today for a Pentium 3 equivalent.

      The term "Free Market" is commonly misunderstood to mean "A marketplace with no regulation". Adam Smith (and many others) recognized that for a market to be _truly_ free, (that is, its prices are set purely by competition on the behalf of sellers and information sharing on the behalf of purchasers, rather than artificial barriers to entry), economic rents _must_ be eliminated. Thus, regulation and government action that removes and prevents the formation of artificial monopolies is _absolutely necessary_ for the existence of a open and competitive market.

      Maybe you disagree with Smith. One only needs to look at the sorry state of Internet access in the densely populated urban areas of the US to see how artificial barriers to entry and anticompetitive action result in market stagnation and a poorer result for purchasers.