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New Re: explain why no licence no chips is a bad idea please

The FTC has charged Qualcomm with violating the FTC Act. The complaint alleges that Qualcomm:

* Maintains a “no license, no chips” policy under which it will supply its baseband processors only on the condition that cell phone manufacturers agree to Qualcomm’s preferred license terms. The FTC alleges that this tactic forces cell phone manufacturers to pay elevated royalties to Qualcomm on products that use a competitor’s baseband processors. According to the Commission’s complaint, this is an anticompetitive tax on the use of rivals’ processors. “No license, no chips” is a condition that other suppliers of semiconductor devices do not impose. The risk of losing access to Qualcomm baseband processors is too great for a cell phone manufacturer to bear because it would preclude the manufacturer from selling phones for use on important cellular networks.

It sounds like Qualcomm is demanding to be paid more by the phone manufacturer for access to Qualcomm's patented radios if they use processors from the other manufacturer. If so, that's clearly anti-competitive (especially in a cut-throat business like cell phones), just as MS's per-processor tax for access to Windows at cut-rate prices was anti-competitive.

The FTC link has a link to the 35 page .PDF complaint.



New See the second point in the complaint
Qualcomm has patents that cover the standards underpinning the essentials of a cell phone. They were using those to force the sale of their chips. That's the big no-no.

It is interesting to see Apple caved on this as they had a round with Samsung in court regarding their FRAND licensing terms and were handed a clear victory.
New /cynic
Unless Apple thought doing this would make it harder on the Android market, since every company would have to negotiate their own terms without collective bargaining power.

     FTC files suit against Qualcomm - (Another Scott) - (5)
         explain why no licence no chips is a bad idea please -NT - (boxley) - (4)
             Re: explain why no licence no chips is a bad idea please - (Another Scott) - (2)
                 See the second point in the complaint - (scoenye) - (1)
                     /cynic - (drook)
             See DOJ's Chapter 5: "Antitrust Issues In The Tying And Bundling Of Intellectual Property Rights" - (a6l6e6x)

No pea soup happening, I hope.
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