Qualcomm versus US FTC 'no license, no chips' antitrust trial wraps up

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in iPhone
The United States Federal Trade Commission and Qualcomm have both presented closing arguments over the contentious 'no license no chips' policy -- and the ultimate ruling will alter the trajectory of Apple's legal battle with the chip manufacturer.




The trial arguments that have taken the better part of January concluded on Tuesday, ahead of schedule. Closing arguments from both the Federal Trade Commission's battery of attorneys, versus Qualcomm's array were heard.

"The evidence is overwhelming that Qualcomm engaged in exclusionary conduct," said FTC lawyer Jennifer Milici. "The effects of Qualcomm's conduct, when considered together, are anticompetitive."

For it's part, Qualcomm defended the "no license no chips" policy not by asserting its legality, but instead claiming that there was no proof that it had hurt device manufacturers at all. Frequent spokesperson for Qualcomm, and head attorney Robert Van Nest led the closing arguments.

Judge Lucy Koh heard the case, and expressed her characteristic exasperation with both parties during the trial, as she did during the Apple versus Samsung matters. She warned that given the complexity and the stakes, that her decision would take longer than normal, according to the Wall Street Journal.

The FTC's lawsuit dates back to 2017, and accuses Qualcomm of antitrust violations by forcing chip buyers to sign patent licenses at inflated rates. The Commission rested its case on January 16.

Qualcomm has defended its practices by a number of means, for example pointing to the high cost of innovation. Apple has called the chipmaker's demands "onerous," at one point asking Apple to cross-license all of its intellectual property to get a direct license for standards-essential patents, something it decided to eschew.

Apple's Chief Operating Officer Jeff Williams recently revealed that Apple wanted to return to a mix of Intel and Qualcomm modems for 2018 iPhones, but was shot down by Qualcomm CEO Steve Mollenkopf. The two companies have been engaged in a global legal war since 2017, instigated by Apple, which sued over nearly $1 billion in rebates allegedly withheld as retaliation for cooperation with antitrust investigators.

Comments

  • Reply 1 of 8
    melgrossmelgross Posts: 31,729member
    Since we don’t know what the ruling will be, it MIGHT alter the trajectory. We hope it will.
    lolliverwatto_cobra
  • Reply 2 of 8
    FatmanFatman Posts: 298member
    Apple must have a solid case to take it this far. Qualcomm currently has the best technology out there. We can only hope that after the smoke clears, Apple will again use Qualcomm chips until Intel (or Apple itself) has technology on par with Qualcomm's offering to enable them to ditch them completely without being at a disadvantage.
    watto_cobra
  • Reply 3 of 8
    gatorguygatorguy Posts: 20,708member
    Fatman said:
    Apple must have a solid case to take it this far. Qualcomm currently has the best technology out there. We can only hope that after the smoke clears, Apple will again use Qualcomm chips until Intel (or Apple itself) has technology on par with Qualcomm's offering to enable them to ditch them completely without being at a disadvantage.
    I suspect that's what this has been about all along, Apple planning their own chipset instead of using either Qualcomm or Intel.

    When Apple testified in the FTC trial that they were only paying QC $7.50 in royalties per handset (everyone was assuming it was waaay more than that) it did seem it might be less about the money and more about the freedom to go it alone without shackles.
    edited January 30 muthuk_vanalingam
  • Reply 4 of 8
    melgrossmelgross Posts: 31,729member
    gatorguy said:
    Fatman said:
    Apple must have a solid case to take it this far. Qualcomm currently has the best technology out there. We can only hope that after the smoke clears, Apple will again use Qualcomm chips until Intel (or Apple itself) has technology on par with Qualcomm's offering to enable them to ditch them completely without being at a disadvantage.
    I suspect that's what this has been about all along, Apple planning their own chipset instead of using either Qualcomm or Intel.

    When Apple testified in the FTC trial that they were only paying QC $7.50 in royalties per handset (everyone was assuming it was waaay more than that) it did seem it might be less about the money and more about the freedom to go it alone without shackles.
    It was about the fact that Qualcomm wanted to double that fee, in addition to Apple paying for the chips. We read that testimony here a couple of weeks ago, I think it was.
    lolliverwatto_cobra
  • Reply 5 of 8
    gatorguygatorguy Posts: 20,708member
    melgross said:
    gatorguy said:
    Fatman said:
    Apple must have a solid case to take it this far. Qualcomm currently has the best technology out there. We can only hope that after the smoke clears, Apple will again use Qualcomm chips until Intel (or Apple itself) has technology on par with Qualcomm's offering to enable them to ditch them completely without being at a disadvantage.
    I suspect that's what this has been about all along, Apple planning their own chipset instead of using either Qualcomm or Intel.

    When Apple testified in the FTC trial that they were only paying QC $7.50 in royalties per handset (everyone was assuming it was waaay more than that) it did seem it might be less about the money and more about the freedom to go it alone without shackles.
    It was about the fact that Qualcomm wanted to double that fee, in addition to Apple paying for the chips. We read that testimony here a couple of weeks ago, I think it was.
    Yeah. I don't know about that Mel. I think the $7.50 is what Apple and Qualcomm agreed on (yes Apple is still buying some Qualcomm wifi chips for older model iPhones) assuming the testimony was accurately reported.  
  • Reply 6 of 8
    ksecksec Posts: 1,562member
    gatorguy said:
    Fatman said:
    Apple must have a solid case to take it this far. Qualcomm currently has the best technology out there. We can only hope that after the smoke clears, Apple will again use Qualcomm chips until Intel (or Apple itself) has technology on par with Qualcomm's offering to enable them to ditch them completely without being at a disadvantage.
    I suspect that's what this has been about all along, Apple planning their own chipset instead of using either Qualcomm or Intel.

    When Apple testified in the FTC trial that they were only paying QC $7.50 in royalties per handset (everyone was assuming it was waaay more than that) it did seem it might be less about the money and more about the freedom to go it alone without shackles.
    The $7.5 were the initial payment started during early iPhone switching to Qualcomm, which is calculated on 5% of the iPhone selling prices from Foxconn. And no longer the price Apple paid for many years. It was later raised to $17.5+. In light of all the numbers given out in court, I don't think Apple has much case at all. Initially I thought Apple were after a fixed sum per devices, as all new agreement they (should) have with Ericsson, Nokia and others. But turns out this case isn't about that % or fixed number, it was deciding whether Qualcomm had double dipping and were a monopoly. 

    And if Apple were to use their own baseband, they should have done so long ago. That is roughly $4-$5 billion saved purchasing per year when they could have their own R&D and fab it. They simply decide it was too much of a hassle, and designing a baseband along with its subsystem is something that is even more taxing than CPU design. And it is highly likely anything they have design now will be out of date by the time they have it shipped as compared to their competitors. The pace things are moving from 3GPP to shipping in consumer product is actually quite mind boggling fast. 
  • Reply 7 of 8
    melgrossmelgross Posts: 31,729member
    gatorguy said:
    melgross said:
    gatorguy said:
    Fatman said:
    Apple must have a solid case to take it this far. Qualcomm currently has the best technology out there. We can only hope that after the smoke clears, Apple will again use Qualcomm chips until Intel (or Apple itself) has technology on par with Qualcomm's offering to enable them to ditch them completely without being at a disadvantage.
    I suspect that's what this has been about all along, Apple planning their own chipset instead of using either Qualcomm or Intel.

    When Apple testified in the FTC trial that they were only paying QC $7.50 in royalties per handset (everyone was assuming it was waaay more than that) it did seem it might be less about the money and more about the freedom to go it alone without shackles.
    It was about the fact that Qualcomm wanted to double that fee, in addition to Apple paying for the chips. We read that testimony here a couple of weeks ago, I think it was.
    Yeah. I don't know about that Mel. I think the $7.50 is what Apple and Qualcomm agreed on (yes Apple is still buying some Qualcomm wifi chips for older model iPhones) assuming the testimony was accurately reported.  
    That was the original agreement. Qualcomm wanted Apple to pay about twice that.
  • Reply 8 of 8
    chasmchasm Posts: 1,588member
    Let me put it this way: the FTC case mirrors Apple's complaints almost exactly.

    The FTC did not bring this case because Apple asked them. They brought it independently.

    When the US government and America's largest technology company and most of the rest of the industry signs on to a case claiming you're being anti-competitive ... you're being anti-competitive.

    My personal hope is that the ruling is so harsh on Qualcomm that it destroys the company, leaving Apple and other companies picking up hardware engineering talent that benefits the entire sector.
    jony0
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