"An antitrust lawsuit filed by the Federal Trade Commission against Qualcomm Inc. puts a dark cloud over a chip company that had managed to battle back from a steep stock drop.
Qualcomm QCOM, -4.02% derives the bulk of its profits from licensing its technology, but that business has been under attack by regulators off and on for more than 10 years. In 2015, a whopping $975 million fine and royalty rate cut in China emboldened regulators world-wide. In December, South Korea fined Qualcomm $853 million for antitrust violations, saying that it used its position as a key chip supplier as a tool to convince mobile phone makers to agree to unfair terms.
On Tuesday, just days before the Donald Trump administration takes over, the FTC alleged that Qualcomm is using anticompetitive tactics to “maintain its monopoly in the supply of a key semiconductor device used in cellphones and other consumer products.” It also alleged that Qualcomm, in a manner similar to past behavior by chip giant Intel Corp. INTC, +0.03% INTC, +0.03% gave Apple Inc. AAPL, +0.81% “rebate payments” of royalties, conditioned upon Apple’s exclusive use of Qualcomm processors in its devices."
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