from the Betteridge-says-ummmm-yes-and-no dept.
Submitted via IRC for Bytram
A billion-dollar question: What was really behind Qualcomm's surprise ten-digit gift to Apple?
The chip industry's strong-arm tactics have been laid bare this month in the anti-trust legal battle brought by America's Federal Trade Commission (FTC) against Qualcomm.
[...] Qualcomm had sought to hide the fact that it paid $1bn to Apple to secure a five-year exclusive agreement with the company to introduce its cellular broadband modem into the iPhone. Even the judge at one point wasn't sure whether that fact has been disclosed or not.
The payment is critical in that the FTC claims that it proves Qualcomm was using its position as the owner of several "standard-essential patents", or SEPs, on communications technologies to cut deals it would never have been able to negotiate otherwise.
Qualcomm has refused to license that technology to its competitors and, since the patents are critical for smartphones, has used that position to force companies into signing contracts that they would never agree to otherwise, i.e. it is using its monopoly position to distort the market and is damaging competition. That's the FTC's case.
But Qualcomm paints the payment quite differently: it says that Apple insisted on the $1bn payment as an "incentive" and to cover the costs of switching to its radio modem chips from Infineon to Qualcomm in its new phone designs.
Such payments are apparently relatively common in the industry but Qualcomm CEO Steve Mollenkopf admitted in court that it was far bigger than normal. As Mollenkopf tells it, Qualcomm only pushed to become a sole supplier of chips to Apple after that $1bn incentive was insisted upon in an effort to recoup such a massive outlay. It wasn't, he claims, an effort to shut out rivals.
[...] The FTC wants to be able to force Qualcomm to license its SEPs (standard-essential patents) to competitors at a reasonable rate: something that it says would force greater competition into the market and remove Qualcomm's monopolistic hold.
It's not clear yet whether the FTC has managed to make a strong enough case but truth be told it doesn't look good for Qualcomm. In the end, it may all revolve around how the court decides to view the fact that it paid Apple a billion dollars to get its chips into iPhones. ®
Related Stories
Thanks, Apple: Intel will auction off smartphone modem patents, exit industry
Back in April, Apple announced that it would cease all litigation against chip manufacturer Qualcomm and enter a new partnership with the company that will see Qualcomm modems installed in new crops of iPhones.
On that same day, Intel announced it was exiting the smartphone modem business entirely. Now, according to IAM, Intel is going one step further and auctioning off many of its smartphone modem assets.
This information appears to suggest that without Apple as a partner, Intel has no need for its patents surrounding smartphone modems at all.
According to IAM, the Intel auction will see some 8,500 patents up for sale to the highest bidder.
Also at Tom's Hardware and Wccftech.
Previously: Apple Could Switch From Qualcomm to Intel and MediaTek for Modems
Intel Speeds Up Rollout of 5G Modems
A Billion-Dollar Question: What Was Really Behind Qualcomm's Surprise Ten-Digit Gift to Apple?
Apple's Internal Hardware Team is Working on Modems Now
Intel and Qualcomm Announce 5G Modem Modules for M.2 Slots
Intel Quits 5G Modem Business Hours after Apple Settles with Qualcomm
Qualcomm Will Pocket Almost $5 Billion from Apple Settlement this Quarter
How Qualcomm Shook Down the Cell Phone Industry for Almost 20 Years
(Score: 3, Touché) by Runaway1956 on Tuesday January 15 2019, @03:28PM (1 child)
These are attributes that modern businessmen admire. In the business world, all the actors here are "winners".
(Score: 2) by Gaaark on Tuesday January 15 2019, @06:10PM
Winners because everyone else outside those privileged few loses.
--- Please remind me if I haven't been civil to you: I'm channeling MDC. ---Gaaark 2.0 ---
(Score: 4, Insightful) by Anonymous Coward on Tuesday January 15 2019, @03:31PM (1 child)
To give these types of monopolies that companies can do whatever they want with? Isn't the whole point of patents to reduce competition to encourage companies to develop these technologies and eventually have them be in the public domain.
If you disagree with what's happening then you disagree with the premise of what patents are supposed to do. Or at least with these specific patents. Or with patent lengths. Do patents themselves promote the progress? Do tech patents last too long? Does the USPTO grant too many dumb patents?
If the USPTO granted these patents and you disagree with their proper use the problem isn't that the patents are being used as intended, the problem is that the USPTO is granting patents it shouldn't be granting. Or maybe the problem is with the patent system. Maybe the problem is with what patents allow patent holders to do. Maybe the problem is with the fact that tech patents last too long. But in reading this it looks like they just exercised their legal right to use their patents, I don't really see how they broke any laws. Patents are exactly about deciding which trusts should be allowed.
(Score: 0) by Anonymous Coward on Tuesday January 15 2019, @08:33PM
Anti-competitive behaviour is not about monpolies (including patents) but how you use them.
You can't pay, bribe or otherwise "coerce" someone to not buy from your competitors.
And you can't use your monopolies to eliminate competitors in other fields.
Sure, you could solve these issues by forbidding monopolies (including patents) by themselves.
But being ok with patents doesn't mean you have to be ok with them being used to eliminate competition in some other field.
Just like being ok with anyone being allowed to own rifles for hunting doesn't mean you ALSO have to be ok with using them to rob someone.
(Score: 2, Informative) by NateMich on Tuesday January 15 2019, @03:49PM (3 children)
No matter how the tech sites try to spin this, I will never feel sorry for Apple. I don't care that they didn't get to dictate the prices that they'd pay Qualcomm for modems, and I don't feel sorry for them taking a $1B bribe.
Not happening.
(Score: -1, Troll) by Anonymous Coward on Tuesday January 15 2019, @03:59PM (2 children)
You should feel sorry for Apple because Michael David Crawford is not working there anymore. In the deservedly departed absence of Steve "Blow" Jobs, Apple is missing a Reality Distortion Field which Michael David "Cocksucker" Crawford is an expert at providing. Witness the one the only Michael David Crawford wave his limp dick in your direction while MDC intones, "These are the jobs you are looking for."
(Score: 2, Offtopic) by Runaway1956 on Tuesday January 15 2019, @04:11PM (1 child)
Sounds like you have Crawford Derangement Syndrome. Are you equally deranged over Trump?
(Score: 0) by Anonymous Coward on Tuesday January 15 2019, @04:21PM
That depends. Is Trump a warmongering murderous war criminal yet just like Bush and Obama? Time will tell. Maybe enemies of the state will be hanging from Trump Wall real soon. Would you like a wall of executed terrorists?
(Score: 0) by Anonymous Coward on Tuesday January 15 2019, @05:41PM (3 children)
Which is supposedly 243 Billion (https://www.cnbc.com/2018/07/31/apple-q3-cash-hoard-heres-how-much-money-apple-has.html), how likely is Apple to be influenced by a bribe that is 1/243th (or only 0.4%) of their cash pile?
(Score: 0) by Anonymous Coward on Tuesday January 15 2019, @10:41PM
This is why you are posting on S/N, loser.
(Score: 0) by Anonymous Coward on Wednesday January 16 2019, @01:31AM
Dude, it's still a billion dollars. Sure, it may not be life changing money like it would be to a mom & pop grocery, or to Sears, but it's still one billion dollars.
(Score: 0) by Anonymous Coward on Wednesday January 16 2019, @02:41PM
How do you suppose they managed to hoard such a sum? By doing shady things like this. And a whole lot of tax dodging.