The U.S. Federal Trade Commission (FTC) has filed a lawsuit against processor giant Qualcomm Inc. The filing was made on Tuesday as the regulatory body accused the company of “anticompetitive” behaviour. Moreover, the FTC says Qualcomm is monopolizing and has targeted a specific deal with Apple.
Indeed, the commission claims that Qualcomm has used its winning market position as leverage against manufacturers and to push out competitors. The filing states that the company has pushed “onerous” supply and licensing demands on manufacturers.
Qualcomm is the market-leader in semiconductor technology. The company’s various processors hold a dominating position in the mobile market and are found in most smartphones. Despite the filing, the company has said it will contest the FTC and has criticized the body for acting too quickly.
“Qualcomm’s customers have accepted elevated royalties and other license terms that do not reflect an assessment of terms that a court or other neutral arbiter would determine to be fair and reasonable,” the FTC said in its complaint.
The FTC is the regulatory commission that oversees product launches in the US. The body also oversees antitrust laws in the United States. Interestingly, an ongoing shake up in the FTC points to an internal differing of opinion.
Current Democratic Chairwoman Edith Ramirez heads the FTC, but she will leave the position on Feb. 10. The chair will be filled by Republican Commissioner Maureen Ohlhausen, who was named to the position by President-elect Donald Trump. Ohlhausen will oversee the FTC for a short term as Trump plans an overhaul of the commission.
In terms of the Qualcomm case, Ramirez and Democrat Terrell McSweeny voted to file the complaint. Ohlhausen was against the action. Indeed, she said the filing was based on “flawed legal theory … that lacks economic and evidentiary support.”
It would seem (obviously so) that Qualcomm agrees with Ohlhausen’s opinion on the filing. The case says threats to withhold chips were made, while an exclusive deal with Apple was criticized. Qualcomm says it has never withheld chips and will contest the filing:
“This is an extremely disappointing decision to rush to file a complaint on the eve of Chairwoman Ramirez’s departure and the transition to a new Administration, which reflects a sharp break from FTC practice,” said Don Rosenberg, executive vice president and general counsel, Qualcomm Incorporated.
“In our recent discussions with the FTC, it became apparent that it still lacked basic information about the industry and was instead relying on inaccurate information and presumptions. In fact, Qualcomm was still receiving requests for information from the agency that would be necessary to an informed view of the facts when it became apparent that the FTC was driving to file a complaint before the transition to the new Administration. We have grave concerns about the two Commissioners’ decision to bring this case despite a lack of evidence supporting the allegations and theories in the complaint. We look forward to defending our business in federal court, where we are confident we will prevail on the merits.”