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World Qualcomm

Intel and Samsung have both joined the FTC's lawsuit confronting Qualcomm, accusing the smartphone SoC and wireless modem manufacturer of engaging in practices that violate antitrust constabulary. Fair disclosure requires me to note that Intel'southward cursory is impossible to read without chortling. Anyone who recalls AMD's antitrust lawsuits against Intel may accept a like problem, given Intel's smug dismissal of AMD's complaints at the time, compared with the outraged tone it takes in its own court filing against Qualcomm.

Co-ordinate to Intel, Qualcomm has:

[M]aintained an interlocking web of abusive patent and commercial practices that subverts competition on the merits. These practices have coerced mobile-phone manufacturers (also known as "original equipment manufacturers" or "OEMs") into purchasing the chipsets they need from Qualcomm and Qualcomm alone. The FTC's detailed complaint documents the Qualcomm practices that have created that coercive business climate and stymied competition. Qualcomm's behavior has inflicted and continues to inflict precisely the harms that the antitrust laws seek to protect against: damage to the competitive process, to consumer welfare, and to innovation and progress.

Specifically, Intel argues that Qualcomm refuses to sell chipsets unless manufacturers purchase patent licenses and concur to pay Qualcomm revenue on every chipset sold, whether that chipset contains Qualcomm processors or not. It too argues that Qualcomm refuses to license Standard Essential Patents (SEPs) to its competitors, that information technology has arranged an sectional (and below market toll) deal with Apple to corner the market, and that Qualcomm has used a combination of patent licensing and exclusivity deals to prevent the smartphone market place from operation as a costless and contained market.

At present, don't get me incorrect — Qualcomm may well exist found to have engaged in calumniating behavior, and I'm non saying otherwise. But for Intel to complain about Qualcomm's licensing and royalty structures after its own abuses is just magical. Remember, Intel paid $one.two billion to AMD to settle its antitrust case before it went to trial and was fined $i.45 billion by the European union. Its largest partner in crime, Dell, paid $100 million to settle SEC charges that the company misrepresented the impact Intel's predatory rebate practices had on the OEM'southward lesser line. Dorsum then, Intel rebates were so critical to Dell earnings, that they were the only way the company could meet its consensus EPS estimates every unmarried quarter from 2002 through 2006. In the first quarter of FY 2007, 76 percentage of Dell'south operating profit came from Intel exclusivity payments — aka, Intel paying Dell not to use AMD products.

It is, therefore, hilarious that Intel would go to the FTC to declare its inability to compete with Qualcomm.

Samsung backs up Intel'southward claims

That said, Samsung, Intel, and the FTC are making a cohesive set of claims almost Qualcomm's business practices that may well stand upwardly in courtroom. Both Samsung and Intel argue that Qualcomm refuses to license its patents to competitors, despite holding essential patents that are functionally required to build an LTE modem (nosotros've covered FRAND and SEP patent licensing in previous stories on this topic). This could put Qualcomm in violation of the Sherman Act lone, since SEP licensing issues have been previously found to trigger such clauses. Samsung'south filing is more narrowly tailored than Intel'due south, and focuses more specifically on whether Qualcomm is required to license its patents to competitors under the rules that govern SEP and FRAND licensing in the kickoff place. Unsurprisingly, Qualcomm is arguing that it has no legal requirement to license its patents.

LTE market share, 2013

LTE market share, 2013. Qualcomm utterly dominated the LTE market back and so.

Information technology'southward harder to brand objective determinations about whether companies have complied with patent license requirements, compared with whether one company's products are readily available on shop shelves. It makes this state of affairs quite dissimilar from the earlier Intel-AMD lawsuit nosotros alluded to (schadenfreude notwithstanding). We have certainly noticed before that Qualcomm faced robust contest in 2G and 3G modems, but dominated the 4G / LTE space to an unprecedented degree. That has inverse somewhat, now that Intel, Samsung, and a handful of other companies have their own radios in-marketplace. But Qualcomm had the market all simply locked up for quite some fourth dimension. Qualcomm has requested that the conform be dismissed, but the FTC has even so to dominion on that proposal.