U.S. antitrust agency sues Qualcomm over patent licensing

Tue Jan 17, 2017 6:19pm EST
 
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By Diane Bartz

WASHINGTON (Reuters) - The U.S. Federal Trade Commission filed a lawsuit against Qualcomm Inc on Tuesday, accusing the company of using "anticompetitive" tactics to maintain its monopoly on a key semiconductor used in mobile phones.

The FTC, which works with the Justice Department to enforce antitrust law, said that San Diego-based Qualcomm used its dominant position as a supplier of certain phone chips to impose "onerous" supply and licensing terms on cellphone manufacturers and to weaken competitors.

Qualcomm said in a statement that it would "vigorously contest" the complaint and denied FTC allegations that it threatened to withhold chips in order to collect unreasonable licensing fees.

Qualcomm shares fell 4 percent to $64.19 on Tuesday.

The complaint is likely the agency's last major action under current Democratic Chairwoman Edith Ramirez, who will step down Feb. 10, and comes just days before U.S. President-elect Donald Trump takes office on Friday.

Trump is expected to name Republican Commissioner Maureen Ohlhausen as acting FTC chairwoman and will fill three vacancies that will reshape the agency.

Ramirez and fellow Democrat Terrell McSweeny voted to approve the complaint but Ohlhausen dissented, saying that the lawsuit was based on a "flawed legal theory ... that lacks economic and evidentiary support."

In its complaint, the FTC said the patents that Qualcomm sought to license are standard essential patents, which means that the industry uses them widely and they are supposed to be licensed on fair, reasonable and non-discriminatory terms.   Continued...

 
One of many Qualcomm buildings is shown in San Diego, California, U.S. on November 3, 2015.   REUTERS/Mike Blake/File Photo