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Business

Qualcomm Attempt to Throw Intel as Hypocrite Backfires in Antitrust Trial




(Bloomberg) – Qualcomm Inc.'s lawyers saw a chance to score some points in a state antitrust case against chipmaker by making an example of rival Intel Corp. as a company accused of abusing its dominance of an industry. They were wrong.

After an interrogation by Intel's Chief Strategy Director largely repatriated this week, a Qualcomm attorney on Friday denied a judge's invitation to bring Aicha Evans back to the testimony that a non-jurisdiction brought by the Federal Trade Commission moved into his the fourth day of testimony.

"Not from us, your honor," said Qualcomm lawyer Antony Ryan to US district judge Lucy Koh, who claimed Evans, who provoked widespread laughter in San Jose, California, courtroom after one of the liveliest showdowns so far in the case. It also concluded something of an ordeal for him.

Testimony later on Friday from Qualcomm's CEO Steve Mollenkopf was definitely more solid, referring to shipping practices among stalled royalty payments and a cross-check on the ethos of the San Diego-based company. No fireworks, toast or laughter followed.

Evans, who previously drove Intel's mobile chip unit, repeatedly repeated Ryan's questions for opportunities to restore the company's belief that Qualcomm was unfairly using technology license and the management of smartphone components to rule out the competition.

Qualcomm Faces FTC Trial Threatening Smartphone Dominance

Ryan often tried to corner Evans by citing some pieces from her email and pretrial testimony, a common tactic in trials to save time. Evans had none of it, claiming her the right to read documents aloud in full, while the insistent context was crucial. When Ryan tried to disturb her, she ignored him and read on.

Evans was born in Senegal and put her in a very unusual category in the chip industry: a black female leader. Her mission at Intel was to gain market share in mobile phones to try to match the company's dominant holdings on the PC processor industry.

"Mr. Ryan, Mr. Ryan, you go very fast. Simple," she told the lawyer at some point. Previously, she had said, "I'm French speaking, numbers are difficult. I'll ask you to slow down."

Intel, the world's second largest chipmaker, has a 90 percent stake in the lucrative data server chip market. In PC processors, it rises more than 80 percent The only remaining competitor, Advanced Micro Devices Inc., once accused Intel of using the control of this market to force PC decision makers into remaining exclusive users of its products. The two sides settled the case with Intel who paid AMD more Evans argued that Qualcomm had muscled Intel out of contracts with Apple Inc. by locking the iPhone manufacturer in exclusive deals.

"They came back and told us we would have a chance in 2016, but in 2014 we would be lost due to an existing deal Apple had with Qualcomm," she said. "We were put back two years. was a near-death experience. "

Mollenkopf has argued that the government has no evidence that the" no license, no chips "policy has harmed the competition in the industry. Qualcomm claims that Intel's current exclusive chip supplier status for Apple shows that the industry is actually healthy.

Evans completed Qualcomm, but took another dig to the firm that FTC's lawyers would like.

"They are good technical engineers," she said. "It does not give them the right of God to perform unfair business practices."

Friday's session ended after Mollenkopf's testimony, where both sides Trying to make progress with its key arguments The CEO, like other Qualcomm representatives, acknowledged that the company has a policy of not granting chips to phone manufacturers who do not pay for their licensing, the argument being that these license fees go into technology development that benefits the entire industry , not just Qualcomm.

Government attorneys attempted to build support for their case that Qualcomm deliberately used its position in the market to extract high patent law fees and force customers to remain exclusive.

Qualcomm objected to the business model being a by-product by the way the market evolved and was not part of a big design to be disadvantageous to competitors – its leadership in technology, patents and chips are ahead of the industry and supply arrangements have been shaped by supply and demand.

The chipmaker is unique in the industry because it derives the majority of its profits from licensing patents that underlie all modern telephone systems. Handlers pay a percentage of the cost of a phone, whether or not they use chips.

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

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

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

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

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