FTC Targeting Qualcomm for Forcing Apple to Use its Modems [Updated]

The United States Federal Trade Commission today filed a complaint against Qualcomm, accusing the company of violating the FTC Act by using anticompetitive tactics to remain the dominant supplier of baseband processors (aka LTE chips) for smartphones.

According to the FTC, Qualcomm uses its position and its portfolio of patents to impose "onerous and anticompetitive supply and licensing terms on cell phone manufacturers," negatively impacting its competitors.

iphone-7-plus-colors
The complaint specifically addresses a deal with Apple in which Qualcomm required Apple to exclusively use its modems from 2011 to 2016 in exchange for lower patent royalties.

Qualcomm precluded Apple from sourcing baseband processors from Qualcomm's competitors from 2011 to 2016. 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.

Up until 2016, Apple only used Qualcomm modems in its line of iPhones, deviating from the norm with the iPhone 7. Both Intel and Qualcomm modems were adopted for the iPhone 7 and the iPhone 7 Plus, leading to some compatibility and performance discrepancies.

Qualcomm is also accused of refusing to license its standard-essential patents to competing suppliers and implementing a "no license, no chips" tax policy where it supplies its baseband processors only when manufacturers agree to Qualcomm's preferred licensing terms, causing smartphone makers to pay higher royalties to Qualcomm when a competitor's modem chips are used.

The FTC has asked the court to order Qualcomm to put a stop to its anticompetitive conduct and take action to "restore competitive conditions."

Update: According to Qualcomm, the FTC's complaint is based on "flawed legal theory, a lack of economic support and significant misconceptions about the mobile technology industry." Qualcomm says it has never withheld or threatened to withhold chip supply to obtain unfair licensing terms.

"This is an extremely disappointing decision to rush to file a complaint on the eve of Chairwoman Ramirez's departure and the transition to a new Administration, which reflects a sharp break from FTC practice," said Don Rosenberg, executive vice president and general counsel, Qualcomm Incorporated.

"In our recent discussions with the FTC, it became apparent that it still lacked basic information about the industry and was instead relying on inaccurate information and presumptions. In fact, Qualcomm was still receiving requests for information from the agency that would be necessary to an informed view of the facts when it became apparent that the FTC was driving to file a complaint before the transition to the new Administration. We have grave concerns about the two Commissioners' decision to bring this case despite a lack of evidence supporting the allegations and theories in the complaint. We look forward to defending our business in federal court, where we are confident we will prevail on the merits."

Top Rated Comments

diegov12 Avatar
77 months ago
They should stick their nose somewhere else, the Intel modems were shown to be slower than the Qualcomm ones...
By using these practices, they were able to spend more on r and
Awwww.... as if Apple probably doesn't bully companies into only using their products.
I didn't know apple licensed its tech.
When did this happen.
Score: 13 Votes (Like | Disagree)
jdillings Avatar
77 months ago
How about targeting 'Intel' as well for their 'x86' architecture? It's killing the Macs.
No, Tim Cook is.
Score: 12 Votes (Like | Disagree)
DrumApple Avatar
77 months ago
They should stick their nose somewhere else, the Intel modems were shown to be slower than the Qualcomm ones...
Score: 10 Votes (Like | Disagree)
tubeexperience Avatar
77 months ago
They should stick their nose somewhere else, the Intel modems were shown to be slower than the Qualcomm ones...
What does that have to do with Qualcomm anti-competitive practices?
Score: 10 Votes (Like | Disagree)
WarHeadz Avatar
77 months ago
Hard to believe anyone "forces" Apple to do anything.
Score: 9 Votes (Like | Disagree)
oneMadRssn Avatar
77 months ago
They should stick their nose somewhere else, the Intel modems were shown to be slower than the Qualcomm ones...
This has nothing to do with what's better. The issue is Qualcomm basically unfairly prevented competition by improperly licensing standard essential patents.
Score: 6 Votes (Like | Disagree)

Popular Stories

maxresdefault

Can't Get an iPhone 14 Pro? Here's Why You Should Wait for the iPhone 15 Ultra

Monday December 5, 2022 11:44 am PST by
Due to production issues at Apple supplier factories in China, the iPhone 14 Pro and iPhone 14 Pro Max are backordered and basically out of stock at every store. If you were planning to gift or receive an iPhone 14 Pro model for the holidays and didn't already get one, you're basically out of luck because they're gone until late December. Subscribe to the MacRumors YouTube channel for more ...
Apple advanced security Advanced Data Protection screen Feature

FBI Calls End-to-End Encryption 'Deeply Concerning' as Privacy Groups Hail Apple's Advanced Data Protection as a Victory for Users

Thursday December 8, 2022 2:45 am PST by
Apple yesterday announced that end-to-end encryption is coming to even more sensitive types of iCloud data, including device backups, messages, photos, and more, meeting the longstanding demand of both users and privacy groups who have rallied for the company to take the significant step forward in user privacy. iCloud end-to-end encryption, or what Apple calls "Advanced Data Protection,"...
General iOS 16 Feature Yellow

iOS 16.2 for iPhone Launching This Month With These 8 New Features

Thursday December 1, 2022 8:44 am PST by
Apple plans to publicly release iOS 16.2 for the iPhone in mid-December, according to Bloomberg's Mark Gurman. The update remains in beta testing for now, with at least eight new features and changes already uncovered so far. iOS 16.2 introduces a number of new features, including Apple's new whiteboard app Freeform, two new Lock Screen widgets for Sleep and Medications, the ability to hide...
maxresdefault

Hands-On With Apple Music Sing in iOS 16.2

Wednesday December 7, 2022 12:24 pm PST by
With the iOS 16.2 release candidate that came out today, Apple added the new Apple Music Sing feature that was announced earlier this week. We thought we'd check out the new karaoke feature to see how it works. Subscribe to the MacRumors YouTube channel for more videos. Apple Music Sing is available on modern iPhones and iPads, as well as the newest Apple TV 4K. It's built in to the Apple...
Apple car wheel icon feature yellow

Apple to Charge Under $100,000 for Apple Car, Launch Planned for 2026

Tuesday December 6, 2022 2:31 pm PST by
Apple is aiming to launch an Apple-branded consumer-oriented vehicle by 2026, and its goal is to hit a price point under $100,000 to make the car appeal to a wider range of customers, reports Bloomberg. Apple initially planned to design a car that might look similar to Canoo's Lifestyle Vehicle, where passengers could face one another in a limousine-style car with no steering wheel or...
General iOS 16 Feature Yellow

iOS 16.2 for iPhone Expected to Launch Next Week With These 12 New Features

Thursday December 8, 2022 7:05 am PST by
iOS 16.2 is expected to be released next week following nearly two months of beta testing. With last-minute additions like Apple Music Sing and Advanced Data Protection, the software update now has over a dozen new features for the iPhone. Below, we've recapped many of the new features coming with iOS 16.2, including Apple's new whiteboard app Freeform, two new Lock Screen widgets, the...
introducing apple music sing

Apple Music Adding a Karaoke Experience With Apple Music Sing

Tuesday December 6, 2022 7:09 am PST by
Apple today announced Apple Music Sing, a new feature in Apple Music that lets users sing their favorite songs with adjustable vocals and more. Apple Music Sing will utilize Apple Music's real-time lyrics to allow users to sing to their favorite songs using adjustable vocals, background vocals, and duet view to allow more than one singer.Apple Music Sing includes: Adjustable vocals: Users...
Twitter Feature

Twitter to Charge $11 Per Month for Twitter Blue on iPhone, $7 on Website

Wednesday December 7, 2022 6:47 pm PST by
Twitter plans to charge $11 per month for a Twitter Blue subscription on the iPhone in order to account for the 30 percent cut that Apple takes from in-app purchases, reports The Information. On the web, Twitter Blue will be priced at $7 per month. Prior to when Twitter Blue was paused, Twitter was charging $7.99 for a subscription, but the pricing will change before it relaunches. According ...
Apple advanced security Advanced Data Protection screen Feature

Apple Announces End-to-End Encryption Option for iCloud Photos, Notes, Backups, and More

Wednesday December 7, 2022 10:00 am PST by
Apple today announced it is expanding end-to-end encryption to many additional iCloud data categories on an opt-in basis for enhanced security. iCloud already protects 14 data categories using end-to-end encryption by default, including the Messages app when backups are disabled, passwords stored in iCloud Keychain, Health data, Apple Maps search history, Apple Card transactions, and more,...