Qualcomm is a company that in my world is something like Google. Let me remind you that it is engaged in the production of chips for electronics, including modern modems for communication and processors, which use almost all of the top smartphones on Android. Although in light of recent events, maybe everyone will be on them. I want to say that the company is essentially a monopoly. Yes, there are other companies, but they are usually not up to much Qualcomm (Apple does not count). The only problem is that when you’re a monopoly, you have to fend off competition agencies, and it is Oh so easy. At this time, Qualcomm has won the high-profile case, but what’s next?
The trial of Qualcomm
The current case against Qualcomm was considered in the court of appeal. He concluded that the company had not violated antitrust laws and forced the company to license patents to buy chips.
The Wall Street Journal reportsthat the Ninth circuit U.S. court of appeals overturned the verdict of Qualcomm, saying that the Federal trade Commission has not proven anti-competitive behavior chip giant. However, it should be noted that the court recognized the aggressive nature of the company. He agreed that the actions were drastic, but they didn’t break the law. This was another proof that big companies always try to operate on the edge of the law to increase profits.
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The Federal trade Commission (FTC) has considered the decision “disappointing” and said it continues to consider its options. When one of the parties to the dispute is dissatisfied with the decision of the court, she begins a new trial — so it was and always will be. However, the Commission made clear that it will be for options. The settlement agreement is unlikely, since the Commission had reached an impasse.
What are the charges against Qualcomm
Officials blamed Qualcomm for abusing the licensing system. This means that the company acted so as to force their customers to accept its rates, fees, which sometimes were too high.
In case of failure to pay the chip giant just broke off the relationship with the companies, although for some of them cooperation with a company was very important. In the end they had to choose: to suffer heavy losses, or simply to agree with Qualcomm. Naturally the second was a lesser evil and, at least, allowed to continue to produce their devices.
The terms also provided for the payment by some companies license fees to Qualcomm, even if they are not used the appropriate chips. Apple, for example, for years did not agree with the licensing terms of Qualcomm, until both sides reached an agreement in 2019. After talking about the fact that the new iPhone will receive 5G modem. Perhaps the need for this and led the company to reconciliation. Both realize that it is easier to operate than endlessly litigate.
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Meanwhile, Qualcomm claimedto have achieved that position legally and practically every cell phone uses its patents, regardless of whether its chips inside. This is indeed possible, because some technologies do not suggest more variability.
In the end, the creators of the chips have albeit unwittingly, but to resort to proprietary technologies. It is as if someone patented the wheel. Then all manufacturers of bikes, cars and other vehicles would have to pay contributions, as analog just does not come up. This example is somewhat exaggerated, but you get the idea.
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The result of this trial will not allow the company to avoid the scrutiny of governments outside the United States. She may have other problems in the European Union, South Korea and Taiwan. These countries have already imposed some penalties on the company. However, they are not serious on the background of the profits received by the company from its main activities.
Does it have Qualcomm competitors
This whole situation is good for Qualcomm only from time to time, as many manufacturers are looking for ways to create custom solutions that will avoid pressure from Qualcomm. Even those small producers who can’t create such technology interested in someone to succeed on this path. If there are a few suppliers of chips and several technologies, their manufacturers will be much easier to negotiate.
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If they collude to raise the price higher, then it will be too serious a violation that they got off as easy as Qualcomm this time. Therefore, most likely, they do not, respectively, the current monopolist competitor will receive, and lower profits. May be Qualcomm itself to blame, having put such large royalties, and maybe this is just a stage of development of the industry.