Qualcomm’s massive antitrust fine is good news for Apple

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Qualcomm
Apple and Qualcomm have been battling throughout 2017.
Photo: Qualcomm

Qualcomm has suffered another blow in its battle with Apple after being fined a record $773 million by Taiwan’s Fair Trade Commission for alleged antitrust violations over a period of at least seven years.

Specifically, the fine involves Qualcomm’s collection of NT$400 billion ($13.2 billion) in licensing fees from local companies. The Taiwanese regulator hammered Qualcomm’s monopolistic market status for not providing products to clients who won’t agree to its terms and conditions.

“Qualcomm holds big number of standard essential patents in CDMA, WCDMA and LTE segments and is the dominant provider of CDMA, WCDMA and LTE baseband chips,” the country’s FTC said. “It abused its advantage in mobile communication standards, refused to license necessary patents.”

The news is good for Apple, which has argued throughout 2017 that Qualcomm abuses its position in the marketplace.

Apple vs. Qualcomm

This latest setback is the second Qualcomm has suffered in the past couple months. Back in September, it lost two hearings against Apple — meaning that it is unable to force Apple’s manufacturing partners to make royalty payments before the total quantity of royalties owed is settled, and that it also cannot stop Apple from seeking antitrust cases against Qualcomm in other countries.

The dispute between Apple and Qualcomm started in January this year, when Apple sued Qualcomm for allegedly withholding $1 billion in rebates because Apple assisted South Korean regulators investigating Qualcomm’s business.

Qualcomm responded by claiming that Apple was being purposely misleading, and argued that it had breached its contract. The subsequent decision by Apple to withhold royalty payments to Qualcomm then meant that Qualcomm was forced to revise its earnings forecasts to give a smaller number, due to Apple cutting off one of its major sources of revenue.

Apple’s manufacturers also got dragged into the fight, with even Apple’s biggest rivals stepping up to support Apple. Since then, the battle escalated — with Qualcomm attempting to ban iPhones being imported to the United States that use chips, “other than those supplied by Qualcomm affiliates.”

Source: Bloomberg