Tech and auto industries turn on Qualcomm over antitrust concerns
The US auto and tech industries have urged the US Court of Appeals for the Ninth Circuit to uphold a district court’s antitrust ruling against chipmaker Qualcomm.
In a series of amicus briefs filed last week, trade groups representing leading US carmakers and tech companies, as well as Intel, accused Qualcomm of having an anticompetitive stranglehold on the modem chip market.
Qualcomm is fighting the US District Court for the Northern District of California’s ruling in an antitrust sought brought by the US Federal Trade Commission (FTC).
The FTC argued that the company’s standard-essential patent (SEP) licensing practices violated US antitrust law.
The court agreed, ordering Qualcomm to renegotiate its licenses on fairer terms. Qualcomm has appealed the decision to the US Court of Appeals for the Ninth Circuit, but the modem-chip dependent auto and tech industries are seeking to have the order upheld.
Continental and Denso, two leading automotive technology suppliers, warned that a reversal of the district court’s decision could raise the prices of 5G-connected cars in the future.
Where Qualcomm or any other chipmaker is allowed to have an anti-competitive advantage, “the resulting inefficiency is ultimately borne by consumers in the form of higher prices,” they wrote.
The warning of higher car prices came as automakers warned that the damage done by Qualcomm’s practises could spread to the entire economy, particularly in the internet of things (IoT) era.
In a joint filing, the Association of Global Automakers (AGA) and the Alliance of Automobile Manufacturers (AAM) said that failure to punish Qualcomm could impact competition across the board, they said.
“If Qualcomm decides to repeat its past behaviour in new IoT markets, it could demand a cut of every single improvement to millions of different products that just happen to be connected to the internet—even if the improvements have nothing whatever to do with that connectivity,” the automakers said.
The AGA’s members include the US and North American divisions of Honda, Ferrari, Hyundai, and Toyota, while the AAM’s membership includes BMW, General Motors, Ford, Jaguar, and Volkswagen.
In a separate filing, Intel said that Qualcomm’s licensing practices had forced it out of the modem chip market altogether.
“Despite investing billions of dollars, dedicating thousands of engineers to develop top-tier modem chips, and acquiring two modem businesses along the way, Intel could not surmount the artificial barriers to competition that Qualcomm erected,” the submission said.
Intel sold most of its modem business to Apple in July, at what it says was a “multi-billion dollar loss”.
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