Reuters noted a lawsuit on Friday that could change the way chip designer Qualcomm operates, with opening statements from both the US Federal Trade Commission (FTC) and Qualcomm. The FTC is suing the chip designer and claims that Qualcomm's current licensing policy is anticompetitive. Judge Lucy Koh (who stood behind the bank during the first lawsuit against Samsung against Samsung) will be given a ten-day trial outside the jury.
If the government wins the deal, Qualcomm may be forced to change the way it licenses its patents. Apple has a similar lawsuit against Qualcomm pending, so this process will be followed closely. Qualcomm asks phone manufacturers for a percentage of the retail price of a phone sold on board with a patented Qualcomm component or software. Manufacturers say they should pay only a percentage of the cost of a component that uses a part or software patented by Qualcomm. In addition, manufacturers claim that Qualcomm's patents are standard, meaning that a manufacturer must build a product that complies with industry standards. Licenses for such patents should be based on fair, reasonable and non-discriminatory (FRAND) rates.
During the opening arguments, FTC lawyer Jennifer Milici said: "Qualcomm says you would pay our prices if you want our chips. The only way to get to a market price [for Qualcomm’s patents] is to negotiate without this threat "In addition, the FTC accused Qualcomm of paying Apple discounts if the company promised to use only Qualcomm's modem chips for the iPhone. From 201
1 to 2016, Apple used only the modem chips from Qualcomm on the iPhone. In 2017, such chips were used by Qualcomm and Intel. In 2018, when Apple and Qualcomm filed several lawsuits against each other, Apple only bought fashion chips for the iPhone from Intel. Last January, Qualcomm was fined $ 1.2 billion by the European Commission for paying Apple to use only its modem chips on the iPhone.
On his opening remarks yesterday, the lawyer representing Qualcomm, Bob Van Nest, did not attempt to point to Qualcomm as a dominant player in the fashion chip market and should not be so intensively scrutinized. Using the example of the two largest smartphone manufacturers, Van Nest states that Huawei manages 54% of its modem chips internally, only 22% from Qualcomm and the rest from other chip manufacturers. The lawyer added that Samsung manufactures 52% of the modem chips used on its phones internally, 38% of which comes from Qualcomm and the remainder comes from other sources.