14 DAY TRIAL // The US Federal Trade Commission has filed a lawsuit against Qualcomm, accusing the company of violating competition laws. The company is said to have imposed unfair conditions on its customers in order to weaken its competitors.
The lawsuit was filed on Tuesday and the FTC accused Qualcomm of using anti-competitive tactics, according to PC Mag. Qualcomm manufactures processors found in many smartphones and mobile devices, including flagship phones and low-end Android devices. Snapdragon chipsets are also found in many Apple iPhones.
Qualcomm’s agreement with Apple stretched between 2011 and 2016. The FTC claims that Qualcomm demanded exclusivity from Apple and offered reduced patent royalties in exchange. The chipset maker prevented Apple from buying processors from competitors and imposed royalty payments to make it unprofitable for Apple to contract other companies.
Apple worked out lower royalty costs with Qualcomm
Apple did manage to agree with Qualcomm on lower royalty costs that would help the company save money for the production of the iPhone. Qualcomm’s condition for Apple to use its chips exclusively violates the US competition law, according to the FTC. The Commission is asking the court to ban Qualcomm from signing future anti-competitive deals.
Qualcomm responded to the allegations saying that it has “never withheld or threatened to withhold chip supply in order to obtain agreement to unfair or unreasonable licensing terms. The FTC's allegation to the contrary - the central thesis of the complaint - is wrong.”
Qualcomm added that one FTC commissioner didn’t agree with the charges and that the lawsuit would boost sales of Qualcomm’s competitors.
This isn’t the first time that Qualcomm is in the attention of regulatory commissions, as last year the company received a record fine in South Korea. Back then, the chipset maker was accused of violating competition laws and giving limited access to competing chip manufacturers to standard essential patents. This caused phone makers to pay more royalties than required for modem chips.