US antitrust officials are poised to sue Qualcomm for allegedly using unfair practices in the way it licenses its technology, people familiar with the matter said.
Qualcomm, the biggest maker of semiconductors for mobile phones, disclosed in 2014 that the Federal Trade Commission was investigating its licensing practices and said an enforcement action could lead to a fine or changes to its business.
The suit would be yet another regulatory challenge to Qualcomm’s most profitable 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.
Last month, South Korea, home to two of its largest customers, fined the company 1.03 trillion won ($890 million) and described its practices as monopolistic. The San Diego-based company said it will appeal that decision. Qualcomm is also the subject of investigations by the European Union and Taiwanese authorities.
Qualcomm is the biggest developer of the technology that underlies how mobile devices communicate. The company has been heavily criticized for its high royalty rate demands and licensing conditions. It’s resulted in a slew of regulatory investigationsworldwide.
The chipmaker has argued that the beneficiaries of regulatory action — phone-makers — have struck new deals that acknowledge the validity of Qualcomm’s patents and that users of its technology benefit from its heavy spending on research and development.
Full Content: Bloomberg
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