When Intel and Samsung joined the fray last Friday by filing amicus briefs in support of the FTC's complaint against, matters went from bad to worse for Qualcomm
Last Friday, the FTC, opposing to Qulacomm’s motion to dismiss the antitrust complaint, expressed its concerns by writing:
…Other chipmakers may not wish to sue Qualcomm for a number of reasons, including fear of countersuit for infringement, escalation, litigation fees, disrupted relationships with OEMs, and hope that a public-enforcement solution may emerge.
But that was the day that Intel and Samsung stepped up, separately filing amicus briefs.
In its blog, Intel explained why Intel filed the amicus brief:
…Intel is ready, willing, and able to compete on the merits in this [modern smartphones and cellular communications] market that Qualcomm has dominated for years. But Qualcomm has maintained an interlocking web of abusive patent and commercial practices that subverts competition on the merits. These practices have illegally coerced mobile phone manufacturers into purchasing the chipsets they need from Qualcomm and Qualcomm alone.
Samsung, in its amicus brief, explained why Samsung, “as a Qualcomm licensee ([Samsung Electronics'] handset manufacturing business) and an excluded competitor ([Samsung Semiconductor's] chipset sales arm, to which Qualcomm refuses to grant a license to make and sell licensed chipsets),” is particularly well positioned to support the court.
Further, Samsung wrote:
Samsung, which employs approximately 17,000 people in the United States, is both Qualcomm’s customer (as a handset supplier) and Qualcomm’s potential competitor (as a manufacturer and potential seller of chipsets). In both capacities, Samsung has directly experienced, and been directly harmed by, the exclusionary conduct alleged in the FTC’s Complaint (the “Complaint”): Qualcomm refuses to license its standard-essential patents ( SEPs) on fair, reasonable, and non-discriminatory (“FRAND”) terms so that Samsung can make and can sell licensed chipsets. Given its position, Samsung is uniquely situated to assist the Court in understanding the important antitrust principles at stake in this case.
Remarkably, Samsung, which also provides Qualcomm with foundry service, doesn't seem to mind going up against its own customer. And this is all happening at a time when Samsung's foundry rival Taiwan Semiconductor Manufacturing Co. (TSMC) has a lock on the production of Apple's A10 and A11 apps processors.
Clear imminent danger to Qualcomm
At this point, it’s too early to tell what happens next. As one EE Times contributor recently blogged, the Apple vs. Qualcomm legal cases could be boiled down to one point: They’re unfolding now because Apple has identified Qualcomm as its toughest foe and it is taking action.
As the author pointed out, Apple has filed lawsuits against Qualcomm in three different countries: China, the U.S, and now the U.K.
The squabble between the two is likely to continue.
But beyond the Apple-Qualcomm rivalry, the clear and imminent danger to Qualcomm is the FTC case. If the court acknowledges the merit of the FTC case and proceeds, Qualcomm might be forced into damage control, including second thoughts about fighting the case to the bitter end.
There aren't many firms who can stand up to Qualcomm. The San Diego giant’s worthy opponents boil down realistically to just Apple, Intel and Samsung.
This goes to show how small the electronics industry has already become.
Alternatively, it might just show that Qualcomm has grown so big that it has a stranglehold on an entire industry — which used to be the definition of a monopoly.
— Junko Yoshida, Chief International Correspondent, EE Times