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Qualcomm is one of the biggest chip makers in the world, with its Snapdragon processors powering a huge number of smartphones. But the company is in some hot water as the US Federal Trade Commission has filed a suit against it for unfair business practices.
According to the FTC’s complaint, Qualcomm has been using its powerful market position to essentially impose “a monopoly on baseband processors”, the bits inside of a smartphone that allows cellular communications. The company managed to do this with unfair licensing deals that punished clients that chose competitors’ chips, and extracted large amounts of money on standard-essential patents. This made it economically unviable for customers to use non-Qualcomm products.
Even Apple was reportedly part of this forced payment scheme. When the iPhone-maker looked to escape from Qualcomm’s royalty burden, the chip-maker forced Apple to sign an exclusivity deal for baseband processors between 2011 and 2016.
For its part, Qualcomm denied any wrongdoing and said in a press release it would “vigorously contest” the FTC’s complaint and defend its business practices. The company said the complaint wasn’t based on reality and that the central thesis of the suit, that Qualcomm had charged unfair or unreasonable for licensing deals, is wrong.
However, the US’ Federal Trade Commission isn’t the only one to have found fault with Qualcomm’s business practices. The South Korean government has sued Qualcomm multiple times for unfair licensing terms, and the Chinese government forced the company to sign new patent licensing deals with the country’s top manufacturers.
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