Qualcomm Faces Antitrust Suit from FTC

For Qualcomm (NASDAQ: QCOM), the licensing of its patented wireless technology produced for $7.6 billion in fiscal 2016 revenue. A new lawsuit by the Federal Trade Commission could threaten that income stream in the years ahead. In a statement, the FTC accused Qualcomm of using "its dominant position as a supplier of certain baseband processors to impose onerous and anticompetitive supply and licensing terms on cellphone manufacturers and to weaken competitors." Specific allegations include imposing higher royalties on manufacturers that choose to use processors from Qualcomm competitors, refusing to grant certain licenses to competitors, and granting Apple lower royalty rates to secure a five-year deal as the iPhone maker's exclusive supplier of baseband processors.