US accuses Qualcomm of forcing deal on Apple

To use Qualcomm's chips exclusively in return for lower licensing fees

Qualcomm forced Apple to use its chips exclusively in return for lower licensing fees, unfairly cutting out competitors, the US said in a lawsuit against the biggest maker of mobile-phone chips.

Qualcomm’s exclusive deal with Apple was detailed in a Federal Trade Commission (FTC) lawsuit accusing the chipmaker of illegally maintaining a monopoly for semiconductors used in mobile phones and pocketing elevated royalties from customers.

“Qualcomm recognised that any competitor that won Apple’s business would become stronger, and used exclusivity to prevent Apple from working with and improving the effectiveness of Qualcomm’s competitors,” the FTC said in the lawsuit filed Tuesday.

The lawsuit presents yet another regulatory challenge to Qualcomm’s most lucrative business, technology licensing. The chipmaker gets most of its profits from selling the rights to use patents that are essential to all modern mobile phone systems. Qualcomm has argued that its licensing follows industry standards that have been in place for more than 20 years and are used by other companies.