Published: May 16, 2017 | Source: The Verge | Author: Mark Campbell

Samsung and Intel join the FTC’s antitrust lawsuit against Qualcomm

Qualcomm has had a difficult start to 2017, with the US Federal Trade Commission (FTC) and Apple filing separate lawsuits against the company over anti-competitive behaviour. Now Samsung and Intel have both filed briefs which back the FTC’s case against Qualcomm, both stating that their companies have been harmed by Qualcomm’s misconduct.

While Samsung does create their own chips to compete with Qualcomm, the company also licences chips from the company, like the Snapdragon 835 processor used in their Galaxy S8. Samsung’s complaints are that despite their license to produce Qualcomm silicon, they are unable to make/sell their licenced Exynos chipsets to producers outside of Samsung, which Samsung calls “exclusionary”.

Below is a part of Samsung’s briefing,

Despite having requested a license from Qualcomm, Samsung cannot sell licensed Exynos chipsets to non-Samsung entities because Qualcomm has refused to license Samsung to make and sell licensed chipsets,

Intel had much more to say about Qualcomm’s practices, listing several practices that they say are designed to harm competition and create a market where companies become reliant on Qualcomm.

Below is an excerpt from Intel’s filing against Qualcomm, stating that they force some companies to pay royalties on every handset their sell in the mobile market, even if they do not include Qualcomm chipsets, and create long-running exclusivity agreements that fence off what could be a competitive market.

This dominance arises not from Qualcomm’s inherent superiority, but rather from its anticompetitive practices. As the FTC alleged, these practices take a number of forms:

• An unprecedented “no-license-no-chips” policy, whereby Qualcomm refuses to sell OEMs any chipsets unless those manufacturers also purchase separate patent licenses that require them to pay exorbitant royalties for every handset they sell, regardless of whether the handset contains a Qualcomm chipset;

• A refusal to license SEPs to competitors, in violation of its FRAND commitments;

• A long-running exclusive supply arrangement with Apple that resulted in below-cost pricing for Qualcomm’s chipsets and substantial foreclosure of the premium baseband chipset market.

It is now seeming increasingly unlikely that the FTC will drop this case against Qualcomm, which could have a significant impact on the companies financials depending on the results of this court case.

Qualcomm has already filed a motion to dismiss this case, which is set to be heard in June, though it seems increasingly unlikely that the company will be walking away from this legal battle without sustaining damage.

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