US Trade Commission: Qualcomm misuses patents on network chips

The United States Federal Trade Commission has filed a complaint against Qualcomm for allegedly misusing its patents on network chips. The company charges too high costs for the use of the patents.

By trying to maintain a monopoly position in certain markets, Qualcomm is holding back innovation there, the FTC writes. The committee refers to the company’s network chips, which manage the operation of the mobile Internet connection in smartphones and are also incorporated in Qualcomm’s socs.

The FTC has accused Qualcomm of charging higher prices for its products when a smartphone manufacturer also uses network chips from a competing company. The manufacturers must agree to an expensive license from Qualcomm in order to use other products from the company. In addition, Qualcomm does not make all patents available for use by other companies, although they should under the so-called frand terms.

Apple would be excluded from the practice between 2011 and 2016, according to the FTC, because Qualcomm would have realized that if another company did business with Apple, it would gain a stronger market position. By signing an exclusive deal with Apple, Apple has become tied to the company and the competition is less likely to gain market share.

Qualcomm has responded to the allegations. The company denies the allegations and accuses the FTC that the commission lacked information about the industry, leading it to make false assumptions.

At the end of last year, the South Korean competition authority fined Qualcomm an estimated 815 million euros, for hindering competition and violating patent regulations. Qualcomm is challenging that fine. A year earlier, the chipmaker was fined millions in China for similar reasons. Then the manufacturer did not appeal, but a settlement with the authorities followed.

Two investigations into Qualcomm’s business practices are also underway in Europe. In a preliminary conclusion, the European Commission stated that Qualcomm has illegally paid manufacturers for exclusive purchase of its chipsets. A fine has not yet been imposed in this case, but it could follow if Qualcomm fails to refute the allegations.