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Intel adds to Qualcomm legal woes

Lady Justice

We’re not too sure when, but at some point in the near future Qualcomm execs are going to start waking up in the middle of the night sweating over the fear of another lawsuit appearing in the morning.

A couple of weeks ago it looked like the legal battles were going to calm down a bit, but it has gone completely the opposite direction. Intel is the latest character in the on-going saga, as it accuses the chipmaker of trying to use the courts to quash competition in the market. The statement was requested by the FTC as part of an on-going antitrust investigation, however Intel took a full run-up to stick the boot in.

After humbly calling itself ‘Qualcomm’s only remaining competitor’, it states the chipmaker is using its royalty system to tie in customers and remove any competition in the market. Qualcomm has continued to stand by the claim no modern handset, including the iPhone, would have been possible without its base technologies and is therefore entitled to the royalties. It’s a handy argument for the chipmaker to make, but the growing legal pressure it is facing must be starting to weigh heavy.

Intel is also accusing the chipmaker of lowering prices for Apple in exchange for exclusivity. These prices prevented companies like Intel entering the competition, the company claims, therefore it unfairly manipulated the market.

The statement reads:

“This twisted use of the Commission’s process is just the latest in a long line of anticompetitive strategies that Qualcomm has used to quash incipient and potential competitors and avoid competition on the merits. And although those strategies have sometimes been subtle or complex, Qualcomm’s latest complaint could not be more blatant in its anticompetitive aims.”

Now we realise that the legal landscape surrounding Qualcomm is starting to get a bit complicated, so we’re tried to condense it below:

Qualcomm vs. Apple

The battle of the technology titans which kicked it all off. The spat started with Apple aiding Korean investigators, and has since gone on and on and on. The timeline is below:

January 23: Apple filed a brief accusing Qualcomm of unfairly charging royalties following up the FTC investigation. Qualcomm responded with the accusation that the FTC was only acting under pressure from Apple.

January 26: Qualcomm essentially accuses Apple of being cheap, saying that the iLeader was using the courts to get more favourable terms.

April 11: Qualcomm files countersuit claiming the iChief has been inhibiting the performance of its chips to make Intel look better.

April 28: Apple decides to withhold payments from its contractors so they are not able to pay Qualcomm the appropriate royalties.

May 4: Qualcomm begins to lobby the International Trade Commission to block iPhone shipments, currently manufactured in Asia, into the US.

June 20: Apple files another brief that claims license agreements that secure Qualcomm a fee for every iPhone manufactured are invalid.

July 7: Qualcomm files a complaint with the US International Trade Commission (ITC), claiming Apple is infringing six of its patents, and therefore all iPhone imports should be banned.

Qualcomm vs. Apple contractors

A side battle which escalated directly from the original one with Apple. In April, Apple choked its supply chain to ensure Qualcomm could not get paid which resulted in the chipmaker suing the contracted manufacturers (Foxconn, Pegatron, Wistron, and Compal Electronics) for withholding payments.

And while it started as a bit of collateral damage, the manufacturers are not taking it lying down. Last week, the four made a filing which alleged that Qualcomm violated two sections of the Sherman Act, a US antitrust law.

Qualcomm vs. FTC

Back in January, the Federal Trade Commission (FTC) took issue with Qualcomm, believing it abused abusing its FRAND patent position to manipulate the baseband market in its favour. The watchdog seems to be saying Qualcomm charges elevated fees for its licenses to rival baseband processor makers, putting them at a competitive disadvantage.

This little part of the play also saw Intel and Samsung weight into the debate, expertly spotting an opportunity to kick a competitor while it is down. In May, both the competitors filed amicus briefs backing the Federal Trade Commission’s complaints against the chip giant

Qualcomm vs. Europe

Aside from a recent fine from the European Commission for not helping the regulators with their monopolistic investigation, Qualcomm is also facing another antitrust charge for making illegal payments to a major customer for exclusively using its chipsets.

Other Qualcomm skirmishes

Blackberry was one battle from which the chipmaker came off the worst, with the financial implications impacting result financial results. In short, $815 million had to be refunded to the Canadian handset manufacturer due to Qualcomm overcharging in terms of royalties. Check out the story here.

Just prior to Christmas, Qualcomm felt the wrong of the stick in South Korea, as the Korean Fair Trade Commission (KTFC) handed out a $850 million for violating antitrust laws. Korean regulators also fined the chipmaker in 2008 for using its dominant position in the market unfairly. Here’s the story.

Now, how many people could recall all of that after a couple of pints…


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