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The U.S. Fair Trade Commission Sues Qualcomm for Forcing Apple to use its Chips in iDevices



Last month Patently Apple posted a report titled "Korea's Antitrust Agency Hits Qualcomm with Record $865 Million Fine for Excessive Licensing Fees to Phone Makers." South Korea's Fair trade Commission accused Qualcomm of coercing mobile phone makers, including South Korea's Samsung Electronics and LG Electronics as well as Apple of U.S., to pay excessive licensing fees under unfair conditions set by the company.


The Korean FTC said that Samsung, LG, Apple, Intel, MediaTek, China's Huawei Technologies, and Ericsson of Sweden, participated in its investigation of Qualcomm.


Today Bloomberg reports on the U.S. Fair Trade Commission picking up the ball and filing a similar lawsuit against Qualcomm today accusing the biggest maker of mobile phone chips of illegally maintaining a monopoly over semiconductors used in cellphones and pocketing elevated royalties from customers.


Reportedly the filing notes that Qualcomm Inc. forced Apple Inc. to use its chips exclusively in return for lowering licensing fees, unfairly cutting out competitors, the U.S. said in a lawsuit against the semiconductor company.


The FTC further noted that Qualcomm recognized that any competitor that won Apple's business would become stronger, and used exclusivity to prevent Apple from working with and improving the effectiveness of Qualcomm's competitors.


The lawsuit presents yet another regulatory challenge to Qualcomm's most lucrative business, technology licensing. The chipmaker gets most of its profits from selling the rights to use patents that are essential to all modern mobile phone systems. Qualcomm has argued that its licensing follows industry standards that have been in place for more than 20 years and are used by other companies.


In February 2015 China's National Development and Reform Commission levied a fine of 6 billion yuan ($975 million) on Qualcomm for charging excessive royalties for its third- and fourth-generation telecommunication technology patents. For more on this, read the full Bloomberg report here.


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