FTC Targeting Qualcomm for Forcing Apple to Use its Modems

The United States Federal Trade Commission today filed a complaint against Qualcomm, accusing the company of violating the FTC Act by using anticompetitive tactics to remain the dominant supplier of baseband processors (aka LTE chips) for smartphones.

According to the FTC, Qualcomm uses its position and its portfolio of patents to impose "onerous and anticompetitive supply and licensing terms on cell phone manufacturers," negatively impacting its competitors.

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The complaint specifically addresses a deal with Apple in which Qualcomm required Apple to exclusively use its modems from 2011 to 2016 in exchange for lower patent royalties.
Qualcomm precluded Apple from sourcing baseband processors from Qualcomm's competitors from 2011 to 2016. Qualcomm recognized 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.
Up until 2016, Apple only used Qualcomm modems in its line of iPhones, deviating from the norm with the iPhone 7. Both Intel and Qualcomm modems were adopted for the iPhone 7 and the iPhone 7 Plus, leading to some compatibility and performance discrepancies.

Qualcomm is also accused of refusing to license its standard-essential patents to competing suppliers and implementing a "no license, no chips" tax policy where it supplies its baseband processors only when manufacturers agree to Qualcomm's preferred licensing terms, causing smartphone makers to pay higher royalties to Qualcomm when a competitor's modem chips are used.

The FTC has asked the court to order Qualcomm to put a stop to its anticompetitive conduct and take action to "restore competitive conditions."

Tags: FTC, Qualcomm

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AT&T Customers to Receive More Than $88M in Refunds Following Mobile Cramming Settlement

AT&TThe United States Federal Trade Commission today announced that it is giving more than $88 million in refunds to 2.7 million AT&T customers who had unauthorized third-party charges added to their service bills, something better known as "mobile cramming."

The refunds come from a $105 million settlement AT&T paid the FTC back in October of 2014, after the carrier was accused of allowing third-party companies to bill customers for things like ringtone subscriptions without their consent. Money was also collected from Tatto and Acquinity, two companies involved in the cramming scheme.

Nearly 2.5 million AT&T customers can expect to receive a credit on their bill within the next 75 days, and over 300,000 former customers will be given refund checks. The FTC says the average refund amount customers will receive is $31, and checks are going out starting today.
"AT&T received a high volume of complaints related to mobile cramming prior to the FTC and other federal and state agencies stepping in on consumers' behalf," said FTC Chairwoman Edith Ramirez. "I am pleased that consumers are now being refunded their money and that AT&T has changed its mobile billing practices."
According to the FTC, the AT&T refunds being provided to customers represent the most money that's ever been returned to consumers in a mobile cramming case.

Up until late 2014, AT&T and several third-party companies were charging customers up to $9.99 per month for subscriptions that provided sham services like ringtones, horoscopes, love tips, and more, with AT&T keeping 35 percent of the money that was taken from its subscribers.

Other mobile carriers, such as T-Mobile, had similar cramming practices. Back in December of 2014, T-Mobile agreed to pay out $90 million in fines.

Recently, AT&T also agreed to pay out an additional $7.75 million for a separate issue that allowed scammers to charge AT&T customers $9 per month for a fake directory service.

Tags: FTC, AT&T

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