Summary: Intel’s filing with the ITC argues that Qualcomm’s request earlier in the month was anti-competitive and should not be granted.
Qualcomm had asked the United States International Trade Commission to prohibit the import of any Intel-equipped iPhones earlier this month. Qualcomm is in the midst of a legal fight with Apple over their use of Intel’s chips.
Now Intel has submitted a new filing with the ITC over Qualcomm’s request, calling it an anticompetitive scheme to keep competitors like Intel from being able to tackle the modem market that Qualcomm currently sits atop.
Intel wrote, “Qualcomm’s complaint is a transparent effort to stave off lawful competition from Qualcomm’s only remaining rival. This twisted use of the Commission’s process is just the latest in a long line of anticompetitive strategies that Qualcomm has used to quash incipient and potential competitors and avoid competition on the merits.”
In Qualcomm’s filing, they argued that Apple’s iPhone infringes on six of their patents, but only those with Intel modems and not the iPhones with their modems. Qualcomm explained that limiting all iPhones would hurt the public interest, according to Qualcomm general counsel Don Rosenberg.
However, Intel argues, “An exclusion order would cause significant harm to the public interest. The vital public interest in restraining Qualcomm from shutting Intel out of the market for premium LTE modems led the Federal Trade Commission, after an extended investigation, to bring an action in district court to stop Qualcomm’s anticompetitive conduct.” They see the ban that Qualcomm desires as driving up the cost of iPhones for U.S. consumers on top of stifling “future innovation.”
Qualcomm had been the provider of all modems in the iPhone until last year when Apple started using Intel cellular modems in some of their iPhone 7 phones. Analysts predict that Intel will continue to grow, inhabiting a larger share of the 10th anniversary iPhones due to be released sometime this year.
Apple first opened a suit against Qualcomm for “unfairly insisted on charging royalties for technologies they have nothing to do with.” Qualcomm countersued, denying Apple’s allegations and raising their own accusations such as Apple partnering with others like Samsung to prepare a full-scale regulatory attack against them by providing false and misleading statements about them to regulators.
Intel argues that Qualcomm has a history of anti-competitive actions. This includes requiring companies to pay license royalties “on [their] preferred terms” in order to receive their chips. Since they are the primary makers of modem chips that can hook up to cellular networks globally, they have been able to get away with collecting fees on nearly every modern phone throughout the world. Reports indicate that roughly two-thirds of their profits come from the licensing of their technology.
The missing royalties and legal bills are beginning to take a toll on Qualcomm’s finances. Their third-quarter net income is down 40 percent from a year ago. They also announced that another company has begun withholding royalties but would not name them. Bernstein Research analyst Stacy Rasgon assumes it is Chinese giant Huawei.
Do you think Qualcomm should be allowed to request that only Intel iPhones being banned from import? Tell us your thoughts in the comments below.
To learn more about Qualcomm’s fight, read these articles:
- Two Antitrust Investigations into Qualcomm
- Apple Sues Qualcomm for Unfair Licensing Terms
- Apple Files Lawsuit against Qualcomm in China
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