FTC files antitrust lawsuit against Qualcomm

Jan. 18 (UPI) -- The Federal Trade Commission announced an antitrust lawsuit against semiconductor manufacturer Qualcomm Inc.

The suit, filed Tuesday in California, charges Qualcomm with tactics meant to maintain its monopoly in certain baseband processors – a key element of mobile cellular devices – and to "impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors."

At issue, the FTC said in a statement, are Qualcomm patents declared essential to telecommunications industry standards. In exchange for having its patented technologies included in standards written by Qualcomm and other companies, participants typically offer licenses with what are known as "fair, reasonable and non-discriminatory," or "FRAND," terms. Qualcomm allegedly elevated royalty payments and other license terms on use of what are regarded as essential patents. The alleged action amounted to an extra cost, which the FTC compared to a tax, for baseband processors produced by competitors.

The suit asks for a federal judge to take action to restore a competitive landscape, which could potentially result in monetary penalties against Qualcomm. The suit mentioned Apple Inc., which sought relief from Qualcomm's high royalties and received it with the condition that Apple would exclusively use Qualcomm's baseband semiconductor chips from 2011 to 2016.

Don Rosenberg, Qualcomm executive vice president, said in a statement: "The intellectual-property-rights policies of the cellular standards organizations do not require licensing at the component level, and the FTC does not have the authority to rewrite industry policy. That is for the industry, not a regulator, to decide."

The three-person commission voted 2-1 to begin the suit. The dissenter was Maureen Ohlhausen, the only Republican on the commission. She is expected to become the FTC chief after president-elect Donald Trump takes office, the Wall Street Journal reported.