US Suing Qualcomm Over Accusations Of Strong-Arming Apple Into Anti-Competition Deal

The U.S. Federal Trade Commission is currently suing the chip maker Qualcomm, accusing it of forcing Apple to only use its chips for its devices and cutting off the competition. This puts the government agency directly in conflict with the single biggest mobile chip maker in the world.

According to the lawsuit that the FTC filed, Qualcomm maintained its monopoly over the semiconductors inside mobile devices as well as collecting illegally elevated royalties from those that it forced into the arrangement. The lawsuit was filed Tuesday, Bloomberg reports.

“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,” the agency said.

This is a blow to Qualcomm since its biggest source of profit right now is technology licensing. Much of the internal processors used on the majority of mobile devices are made possible through the patented technology that the company owns. By announcing that Qualcomm was doing this in a manner that could be constituted as illegal, the FTC is aiming the spotlight at something that could potentially cripple the chip maker.

As to why the agency only decided to pursue this case now and how it found out, it would seem that the arrangement between Apple and Qualcomm ended last September, Forbes reports. This suggests that along with the expiration of the forced exclusivity, the iPhone maker has finally wiggled out of the bind that Qualcomm made for it enough to squeal.

The lawsuit also indicates that the deal started way back when the very first iPhone came out. Since that puts it in 2007, this would mean that Apple has been a prisoner of Qualcomm of sorts for the better part of a decade. Some of the ways that the chip maker kept Apple trapped is by paying it rebates in exchange for not using technology from other companies and threatening to cut off access to its processor technology.