U.S. Joins List Of Countries Taking Issue With Qualcomm's Licensing Business

As QUALCOMM, Inc. (NASDAQ: QCOM) expands its reach in the technology market, it is seeing inadvertent growth on its list of international foes. And the opposition isn’t coming from the usual competitors.

Between February 2015 and December 2016, Qualcomm was fined $975 million in China and $854 million in South Korea for antitrust violations, and it’s currently under investigation for similar infractions in Europe.

On Tuesday, it secured another adversary. The U.S. Fair Trade Commission filed a complaint against Qualcomm for violating antitrust laws and limiting competition for mobile semiconductor devices.

FTC Lawsuit

According to the FTC, Qualcomm threatened cell phone manufacturers to comply with the company’s preferred license terms at the risk of being cut from a critical baseband processor supply. The company is also accused of charging elevated royalties on products using competitor chips, as well as “extracting exclusivity from Apple in exchange for reduced patent royalties.”

Company representatives rejected the allegations and, in a press release, said the complaint is “based on a flawed legal theory, a lack of economic support and significant misconceptions about the mobile technology industry.”

Corporate concerns echoed those of FTC Commissioner Maureen Ohlhausen, who voted against the filing based on insufficient evidence of anticompetitive effects. In her dissent thesis, Ohlhausen said the FTC lawsuit “will undermine U.S. intellectual property rights in Asia and worldwide.”

Following the initial FTC announcement, shares plunged 5 percent and closed about $3 lower than they opened. Values were rebounding on Wednesday despite Credit Suisse issuing a “Restricted” rating on Qualcomm stocks.

Image Credit: By Ryo FUKAsawa - https://www.flickr.com/photos/fukapon/21879687510, CC BY 2.0, Wikimedia Commons