Qualcomm is being sued by the FTC, the U.S. antitrust authority as it is accused of using anti-competitive practices when selling some of its products.
The FTC is the United States Federal Trade Commission. It is an independent agency. Its main target is to promote and ensure consumer protection. FTC tries to do so by trying to eliminate and prevent certain practices. More exactly, anticompetitive business methods. And it has not set its eyes on Qualcomm.
Qualcomm is a San Diego, California-based company. The multinational activates in the telecommunications and semiconductor equipment markets. It is specialized in marketing and designing various products. These target telecommunication services and products.
And the FTC is suing for its reported tactics in the area. FTC stated as follows. The company is making use of its dominant position in the modem market. More exactly, it is reportedly trying to reduce its competition.
It is reportedly doing so by putting pressure on manufacturers. These are reportedly being presented with two choices. They could either buy Qualcomm’s products. But they would be paying extra if they want to use the patent. Or they could say good-bye to their products.
Qualcomm issued a statement on the matter. The company denied the FTC’s allegations. Company officials stated as follows.
The Commission is reportedly basing its accusation on a “flawed legal theory”. They went to continue. FTC’s claims allegedly lack an economic support. And they are also based on a misconception. Qualcomm’s response links this later to the FTC’s view of the mobile technology industry.
FTC offered quite some details. It stated that it based its allegations on the following. Qualcomm supposedly used a “no license, no chips” policy. As such, it reportedly denied selling its chips to certain companies. These later supposedly did not agree to the terms.
But they reportedly didn’t have much of a choice. FTC points out the following. Qualcomm is amongst the only companies to supply such an item. More exactly, large quantities of such a product.
As such, if they did not agree, their phone production levels would fall. Qualcomm also reportedly used the following tactic. Its licensing terms supposedly required a higher tax for some products. More exactly, for phones based on modems built by another company.
The commission alleges that Qualcomm intentionally raised its competition’s prices. FTC went to call this method harmful. Because it reportedly excludes competition and damages it.
These fees are reportedly “disproportionally high” when compared to the part’s utility.
Qualcomm responded to all of the claims. Company officials declared the following. According to them, the case built by the agency is based on “significantly flawed” facts.
Especially as Qualcomm never performed such actions. More exactly, it did not withhold chip supplies. Nor did it threaten to do so. And especially not in order to obtain agreement. It reportedly did not establish unreasonable or unfair licensing terms.
Don Rosenberg, the Qualcomm General Counsel, also released a declaration. The company is looking forward to defending itself in the federal court. It is also confident that it will “prevail on the merits”.
This is not Qualcomm’s first anti-competitive trial. It faced other such regulations in China and South Korea as well. A decision on the current trial remains to be established.
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