The Billion-Dollar War

Issue 10-09-17   |   Reviewer:   J. Vincent Eagan, JD, Ph.D.
Disciplines:


Abstract

Apple Inc. has been challenging, in negotiations and in the courts, the pricing model Qualcomm Inc. uses for its wireless modems. Qualcomm has a licensing fee based on the price of the phone, not the price of the chip.

The Korean Fair Trade Commission has already fined Qualcomm $850 million “for abuse of market dominance.” The U.S. Federal Trade Commission (FTC) has accused Qualcomm of anticompetitive tactics. It is customary in the cell phone business for inventors to reach agreements with standards bodies to charge prices that are “fair, reasonable, and nondiscriminatory” as a condition for inclusion in a particular wireless standard.





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