As its quarterly earnings announcement looms, bad news keeps piling up for Qualcomm. The U.S. chip giant lost an appeal in a European Union court Monday, while back in the U.S. it faces a new round of antitrust allegations, filed late Tuesday by four ODMs.
Qualcomm’s latest European troubles originate in a 2010 suit filed by Icera, a British chip maker owned by Nvidia. Icera accused Qualcomm of using unfair financial incentives to attract new customers. That complaint formed the basis for the European Commission’s latest antitrust investigations into Qualcomm.
Qualcomm, formally charged by the European Commission for using anti-competitive methods, last month asked the European General Court in Luxembourg to suspend the order. Qualcomm argued that the EU competition authority's demand requires “enormous work and significant financial costs estimated at no less than 3 million euros as it involved more than 50 employees and 16 external advisers.”
Court President Marc Jaeger, however, dismissed the appeal in a July 12 ruling.
Reuters reported earlier this week that Qualcomm, by losing the appeal, faces the threat of a daily fine of 580,000 euros ($665,000) for failing to provide EU antitrust regulators with information. Contacted by EE Times about the potential fine, Qualcomm offered no response.
Meanwhile, the four contract manufacturers for Apple’s iPhone filed on Tuesday antitrust allegations against Qualcomm in the U.S. District Court for the Southern District of California.
These are counterclaims to a Qualcomm lawsuit filed in May, in which the smartphone chip giant seeks to force contractors to pay Qualcomm license fees that Apple directed them to stop paying.
It’s curious that a lawyer representing these four ODMs — Hon Hai Precision Industry, Wistron Corp., Compal Electronics Inc. and Pegatron Corp. — is Theodore J. Boutrous Jr., a prominent First Amendment lawyer. He was a lead attorney for Apple in the San Bernardino mass-murder case, when Apple fought the FBI over access to a locked, encrypted iPhone. An Apple official confirmed to Reuters that the Cupertino, Calif.-based company is funding the four ODMs’ legal defense. Boutrous said in a statement that these iPhone contractors “are bringing their own claims and defenses against Qualcomm."
What started out as a botched royalty negotiation between Qualcomm and Apple earlier this year has devolved to the point that Qualcomm has exercised six broad smartphone patents against Apple in two court actions earlier this month, asking for damages and a ban on importing allegedly infringing iPhones.
Beyond Qualcomm vs Apple, Qualcomm’s big-picture problem, and the root cause of its legal fights throughout the world, is Qualcomm’s alleged anti-competitive behavior. Similar allegations are being voiced by competitors all over the global market.
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