Intel accuses Qualcomm of abusing its mobile chip monopoly
Qualcomm’s dispute with Apple over patents on its chip tech recently took a nasty turn when it asked the US International Trade Commission (ITC) to ban iPhone sales in the US. In response to a request from the ITC, Intel has now made its own statement, accusing Qualcomm of abusing its monopoly position and not licensing “standard-essential” patents at a fair rate as required by law. Of course, if anyone knows how to spot abuse of a chip monopoly, it’s Intel.
The dispute started when Apple sued Qualcomm for “abusing its clout” in the mobile chip industry. It got more combative when Apple began withholding patent royalties via suppliers like Foxconn. It argued that Qualcomm hasn’t licensed its tech under “fair, reasonable and non-discriminatory” terms, claiming that it’s charging five times more than all of its other licensors combined. (The US Federal Trade Commission filed a separate lawsuit against Qualcomm, and both South Korea and China slapped hefty fines on Qualcomm over its trade practices.)
Qualcomm, for its part, said Apple “unilaterally declared the contract terms unacceptable; the same terms that have applied to iPhones and cellular-enabled iPads for a decade.” It then turned around and sued Apple’s suppliers that use Qualcomm patents to claw back the royalties.
Intel got involved in the dispute because its LTE modems, used in some of Apple’s latest iPhones, allegedly infringe on Qualcomm patents. Qualcomm has demanded that Apple replace those parts with chips that use its own baseband modems. (Intel’s LTE modem is reportedly used on GSM-radio iPhone 7 and 7 Plus models from T-Mobile, AT&T and the rest of the world, while Qualcomm radios are used on CDMA models by Sprint and Verizon in the US).
Intel accused Qualcomm of further anti-competitive practices — namely, offering Apple lower licensing fees for using its chips exclusively. “These arrangements foreclosed rivals like Intel from competing for Apple’s vital business,” it said.
Intel believes that Qualcomm has a more sinister aim with its Apple patent dispute: Crushing Intel in the mobile chip market. “Qualcomm did not initiate this investigation to stop the alleged infringement of its patent rights; rather, its complaint is a transparent effort to stave off lawful competition from Qualcomm’s only remaining rival,” it states.
Overall, Intel believes that the ITC needs to consider Qualcomm’s pattern of what it calls “abusive” legal practices. “This twisted use of the Commission’s process is just the latest in a long line of anticompetitive strategies that Qualcomm has used to quash incipient and potential competitors and avoid competition on the merits.”
There’s a lot of irony in this, of course. In the ITC claim, Intel is depicting itself as the poor victim of a mobile chip monopolist, even though it was fined $1.4 billion by the EU for abusing its own PC chip monopoly with AMD. Nevertheless, its claim to be an underdog is effectively correct: Next to Qualcomm, Intel has a pitiful share of the mobile chip market. The ITC is set to study the complaint in August, and a trial is expected sometime next year.
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