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Qualcomm Attempt to Cast Intel as Hypocrite Backfires in Antitrust Trial



(Bloomberg) – Qualcomm Inc.'s lawyers have seen the possibility of obtaining some points in a government antitrust lawsuit against the chipmaker by making an example of rival Intel Corp. as a company accused of abusing its domination over a & # 39; industry. They were wrong.

After a question from Intel's chief strategy officer, largely failed this week, a Qualcomm attorney on Friday refused a judge's invitation to bring Aicha Evans back to the witness stand as a non-judicial process brought by the Federal Trade Commission transferred on its fourth day of testimony.

"Not from us, your honor", Qualcomm's lawyer, Antony Ryan, told US District Judge Lucy Koh, provoking applause from Evans, which caused widespread laughter in the San Jose, California, after one of the liveliest showdowns so far in the case.

Witness later Friday from Qualcomm's CEO, Steve Mollenkopf, was much stiffer, with a reference to shipping practices between pending royalty payments and a cross-examination of San Diego ethics. . company based. There arose fireworks, cheers or laughter.

Evans, who previously ran Intel's mobile phone chip unit, repeatedly turned Ryan's applications into opportunities to reaffirm his company's view that Qualcomm would unfairly use technology licenses and his leadership in the components of smartphones to block the competition.

Qualcomm Faces Menacing Smartphone Domain for FTC Trials

Ryan often tried to put Evans aside by citing fragmented fragments of his e-mails and previous testimonials, a common tactic in testing to save time. Evans did not have any, claiming his right to read the documents aloud in their entirety while the context was fundamental. When Ryan tried to interrupt her, she ignored him and continued reading.

Evans was born in Senegal, inserting her into a very special category in the chip industry: a black woman. His mission at Intel was to win market share in mobile phones to try to match the dominant position of the company in the field of personal computer processors.

"Mr. Ryan, Mr. Ryan, you're going very fast, easy," the lawyer said at one point. Before he said: "I'm a French speaker, the numbers are difficult.

Intel, the second largest chip maker in the world, holds about 90% of the profitable market for computer server chips, while in personal computer processors reaches over 80% Its only remaining competitor, Advanced Micro Devices Inc., has accused Intel of having used the control of this market to force PC manufacturers to remain exclusive users of their products. The two sides have solved the case with Intel paying AMD an additional $ 1 billion in 2009.

Qualcomm dealt with another arrest before the FTC antitrust trial

Evans claimed that Qualcomm had caused Intel to stop contracts with Apple Inc. blocking the iPhone manufacturer in exclusive agreements

and told us that we would have a chance in 2016, but in 2014 we lost due to a pre-existing agreement that Apple had with Qualcomm " , he said. "We have been two years behind. death experience. "

Mollenkopf has claimed that the government has no evidence that its" no license, no chips "policy has damaged competition in the industry." Qualcomm states that Intel's current status as an exclusive chip vendor for Apple shows that The industry is, in fact, in good health.

Evans has integrated Qualcomm, but has made another survey of the company that the FTC lawyers will appreciate.

"They are excellent technical engineers," he said. it does not confer on them God's right to carry out unfair commercial practices. "

Friday's session ended after Mollenkopf's testimony, in which both sides tried to make progress with their central arguments. Chief Executive Officer, like other Qualcomm representatives, acknowledged that the company has a policy of not providing chips to non-paying telephone manufacturers, and its argument is that they go into the development of technology for the benefit of the entire industry, not just Qualcomm.

Government attorneys tried to build support for their case that Qualcomm voluntarily used its market position to extract high patent licenses

Qualcomm reiterated that its business model is a by-product of the way where the market has developed and is not part of a major project to disadvantage potential rivals – its technology leadership has pushed its patents and chips to the forefront of the industry and supply agreements have been shaped by supply and from the question.

The chip maker is unique in the industry as it gets most of its profits from license patents that supports all modern phone systems. Manufacturers of mobile devices pay a percentage of the price of a phone regardless of whether they use the chips or not.

The case is Federal Trade Commission v. Qualcomm Inc., 17-cv-00220, United States District Court, Northern District of California (San Jose).

(Updates with Mollenkopf's testimony from the fourth paragraph.)

To contact journalists about this story: Ian King in San Francisco at ianking@bloomberg.net; Kartikay Mehrotra in San Francisco at kmehrotra2 @ bloomberg.net

To contact the publishers responsible for this story: Elizabeth Wollman at ewollman@bloomberg.net ,; Jillian Ward at jward56@bloomberg.net, Peter Blumberg

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