QCOM QUALCOMM Inc

By Brent Kendall 

WASHINGTON -- The Federal Trade Commission on Tuesday sued Qualcomm Inc., alleging the chip maker engaged in unlawful tactics to maintain its monopoly on a semiconductor device used in cellphones.

The FTC, in a suit filed in a California federal court, alleged that Qualcomm used its position as the dominant provider of baseband processors, devices that enable cellular communications, to impose onerous terms on phone manufactures and hobble competitors.

Qualcomm won't sell its processors unless a customer agrees to the company's preferred patent-licensing terms, which forces phone makers to pay elevated royalties to Qualcomm when they use a competitor's chips, the FTC alleged.

The commission also alleged that Qualcomm wrongly refused to license its "standard-essential" patents to competitors despite an obligation to do so. The lawsuit additionally alleged that a Qualcomm exclusive deal with device maker Apple Inc. harmed competition.

The suit asks a federal judge to prohibit the alleged conduct and to take actions to restore a competitive landscape.

Qualcomm couldn't immediately be reached to comment.

The FTC's action came on a 2-1 partisan vote in the waning days of a Democratic majority at the commission. Current FTC Chairwoman Edith Ramirez, an Obama appointee, announced last week that she would step down Feb. 10.

The FTC's current lone Republican, Commissioner Maureen Ohlhausen, dissented from the filing of the lawsuit. She is likely to become acting head of the agency after President-elect Donald Trump takes office.

Write to Brent Kendall at brent.kendall@wsj.com

(END) Dow Jones Newswires

January 17, 2017 17:03 ET (22:03 GMT)

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