The US Federal Trade Commission (FTC) has filed a lawsuit against Qualcomm for anti-competitive practices relating to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products.
The court filing reads that Qualcomm has used its dominant position as a supplier of certain baseband processors to impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors. The FTC said Qualcomm threatened the supply of baseband processors to customers that didn’t agree to its patent licensing terms. A baseband processor is a chip in a smartphone or tablet that handles the cellular transmission. As per FTC, the patents that Qualcomm was seeking from customers were widely used, and should have been licensed on fair, reasonable and non-discriminatory terms.
Qualcomm, in reply to the allegations said “the complaint is based on a flawed legal theory, a lack of economic support and significant misconceptions about the mobile technology industry”. The company 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.