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Qualcomm president: Apple is behind 'regulatory attacks'

JP Mangalindan
Chief Tech Correspondent
Qualcomm President Derek Aberle shows a watch made with a Qualcomm snapdragon processor during a press conference March 2, 2015. REUTERS/Albert Gea

Qualcomm used its 1Q 2017 earnings call on Wednesday to respond to recent allegations from Apple and the Federal Trade Commission that the chip maker engages in illicit, anticompetitive behavior and price-gouging.

One executive even suggested that Apple (AAPL) filed the lawsuit because it simply wants to pay less than the “fair value” to use mobile technology developed by Qualcomm.

“Apple is driving regulatory attacks and misrepresenting facts,” Qualcomm President Derek Aberle stated on the earnings call, referring to a lawsuit filed by the Federal Trade Commission last week against Qualcomm (QCOM). The lawsuit accuses Qualcomm, the dominant supplier of modem chips used by mobile phones, of maintaining a monopoly over those chips through a policy that imposed “onerous” supply and patent-licensing terms on phone partners, which include Apple and Samsung.

The FTC lawsuit arrived on Jan. 17, days before Apple sued Qualcomm in California federal court on Jan. 20. Then, on Jan. 25, the same day as Qualcomm’s earnings call, news broke of two additional lawsuits Apple filed in Chinese court.

The litigation in China broadly accuses Qualcomm of abusing “its clout in the chip industry” in China and violating China’s anti-monopoly laws, according to a Reuters report on Wednesday. Apple is seeking 1 billion yuan, or $145 million.

For Qualcomm, the accusations are as serious as they can get, particularly because Apple and Samsung together accounted for 40% of Qualcomm’s $23.5 billion in revenue for its more recent fiscal year.

Qualcomm execs including Aberle spent a significant part of the company’s earnings call on Wednesday contending there was no truth to Apple’s allegations.

“If you peel apart all the accusations Apple is making, we believe firmly they’re all without merit,” Aberle added. “They essentially want to pay less for the technology they’re using. It’s pretty simple.”

Qualcomm Executive Chairman Paul Jacobs told Yahoo Finance at Davos late last week the chip maker had been in talks with FTC, but that the FTC rushed out its complaint to get ahead of President Donald Trump’s inauguration.

JP Mangalindan is a senior correspondent for Yahoo Finance covering the intersection of tech and business. Follow him on Twitter or Facebook.  

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