SAN FRANCISCO (Legal Newsline) – The Federal Trade Commission’s two-year probe of Qualcomm has led to the government filing suit against the California-based company, accusing executives of employing “onerous” tactics allowing it to “maintain a monopoly on baseband processors.”
Since then, the semiconductor
manufacturer has been slapped with at least two putative class action complaints filed
on behalf of retail purchasers of various cellular devices claiming that the
company’s industry monopolization has paved the way for staffers to charge
consumers inflated prices for many of its mobile products and services.
specifically, the suit states that the company systematically claimed its
“chips” were essential for maintaining various cellular communication
standards. All cellphones and tablets sold by Qualcomm are advertised as
adhering to those standards.
In truth, the government contends the patents offered by the company are
only standard in quality and thus should be marketed and licensed as such.
Qualcomm officials have wasted little time establishing they planned to
vigorously defend themselves against all the allegations.
complaint seeks to advance the interests and bargaining power of companies that
have generated billions in profit from sales of products made possible by the
fundamental 3G and 4G cellular technology developed by innovators like
Qualcomm,” company officials said in a statement made available to Legal Newsline.
In the latter of the two private filings, Apple
Inc. is seeking to recover billions in damages company officials insist stem
from Qualcomm’s alleged illegal practices.
Apple also alleges that Qualcomm owes the
company nearly $1 billion more under an agreement between the two companies
that Qualcomm is now reneging on because Apple has been cooperating with Korean
authorities currently conducting an investigation of Qualcomm.
Qualcomm has already faced an avalanche of
fines and legal actions around the globe stemming from similar suits and
Filed in the U.S. District Court for the
Northern District of California, the government’s suit also accuses Qualcomm of
violating Section 5 of the FTC Act, which prohibits unfair methods of
competition, by excluding competitors and harming competition through the
practice of employing a “no license-no chips” policy.
In that instance, the government contends
the company steadfastly refused to offer its baseband processors to device
makers that wouldn’t abide by its patent licensing terms.
Unlike the government, the two private
suits seek damages in addition to any injunctive relief deemed suitable by the
has never withheld or threatened to withhold chip supply in order to obtain
agreement to unfair or unreasonable licensing terms,” the statement said. “The
FTC’s allegation to the contrary -- the central thesis of the complaint -- is
President Donald Trump and his administration just assuming power, including
what will be a new FTC commissioner, some like Qualcomm Executive Vice President and General Counsel Don Rosenberg are questioning if the timing of
the filing might be politically motivated.
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,” he said in a statement. “We look forward to defending our business in federal
court, where we are confident we will prevail on the merits.”