Qualcomm vs. FTC Trial Resumes, Defying the Next Move for the Smartphone Industry
Last updated May 27, 2021
- Qualcomm is getting ready to defend themselves against monopolistic accusations next week.
- The smartphone world holds its breath as the decision of the court will determine the next steps on all fronts.
- Qualcomm will have a hard time to defend, but no one knows for sure what arguments they will present.
The next episode in the trial of Qualcomm that was sued by the FTC (Federal Trade Commission) in 2016 is going to take place between January 4 and 14. The chip-making giant still faces accusations of monopolistic practices based on selective and overpriced patent selling by the US regulatory agency, so they need to state their defense through solid arguments this time.
The FTC case was the trial that initiated the topsy-turvy in the smartphone world, as Apple was soon to follow with a similar legal action and Qualcomm responding by claiming that Apple still owed them $7 billion for licensing fees. Intel, Samsung, and MediaTek also seized the opportunity to express their dissatisfaction with Qualcomm’s practices, saying that “Qualcomm’s dominance through innovation and hard work have been replaced with monopolistic practices. Those practices “suppress competition and harm consumers”.
This situation has brought concerns in Qualcomm’s investment group, as the company is under threat of losing large amounts of its regular patent fee income. This source of income is utilized by Qualcomm to invest in research and development, so it’s basically what keeps the company at the forefront of the developments in the field and the leadership position that it holds. Should the court decide against Qualcomm, and the company will re-enter the market as a competitor and not as an indisputable leader anymore. This unrest has been reflected in the company’s share price which has witnessed significant losses since the 2016 trials began.
Qualcomm still sees their licensing fees as “fair and reasonable” to all industry groups, and holds that Intel and MediaTek are excluded from buying licenses from them just because they simply don’t need them. The judge though has already slashed their pre-trial claims by making it clear that they need commit to licensing to rivals, as well as to avoid pointing to the Apple-Intel collaboration as proof of their non-monopolistic strategy.
The FTC case will signify the next steps for all legal disputes that Qualcomm has with Apple and other smartphone or chip manufacturers on courts all around the world. As numerous industry analysts point out, Qualcomm’s legal battles with Apple will not clear up until the FTC case is out of the way, so this trial is key for the whole smartphone industry, and everyone involved is holding their breath for what Qualcomm produces in the following days.
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