Apple faces US agency investigation in Qualcomm legal spat

The US International Trade Commission, which has the power to bar products from entering the country, will investigate Qualcomm's complaints against Apple.

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Roger Cheng (he/him/his) was the executive editor in charge of CNET News, managing everything from daily breaking news to in-depth investigative packages. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade and got his start writing and laying out pages at a local paper in Southern California. He's a devoted Trojan alum and thinks sleep is the perfect -- if unattainable -- hobby for a parent.
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Roger Cheng
3 min read

A key US agency has officially stepped into the legal battle between Apple and Qualcomm

The US International Trade Commission, which has the power to ban products from entering the country, confirmed on Tuesday it will investigate Qualcomm's complaint that Apple was illegally using its cellular technology in iPhones powered by modems made by Intel . Qualcomm is seeking to bar all iPhones using Intel modems, which run on the AT&T and T-Mobile networks. 

While there's no specific timing, the ITC said it would set a target date to complete the investigation within 45 days after its start. Qualcomm General Counsel Don Rosenberg warned in July that any decision from the ITC likely wouldn't happen for about 18 months. 

The ITC stepping in is the latest turn of the legal drama that is the Apple-Qualcomm spat, which began when Apple decided it was paying too high a licensing fee for Qualcomm's mobile technology. Apple believes it should be paying a licensing fee based on the value of the modem, while Qualcomm argues it should be based on the value of the phone, considering all of the other technology it's helped developed. 

Going to the ITC is a common tactic when engaging in battles over patents because the prospect of a product ban is often devastating enough to get both sides to the bargaining tables. Tech companies who involve the ITC in their disputes often figure out a resolution before any ban is put into effect. 

It's a common route for Qualcomm, the world's largest provider of mobile chips, which is no stranger to patent battles. The company in July filed its complaint with the ITC, accusing Apple of infringing on six mobile patents. A ban would allow iPhones using its own chips to enter the US. Those models run on Verizon's and Sprint's networks. 

"Qualcomm is pleased with the ITC's decision to investigate Apple's unfair trade practices and the unauthorized importation of products using Qualcomm's patents," said Don Rosenberg, executive vice president and general counsel of Qualcomm. "We look forward to the ITC's expeditious investigation of Apple's ongoing infringement of our intellectual property and the accelerated relief that the Commission can provide."

Intel declined to comment. 

Apple pointed to this prior statement from June: "Qualcomm's illegal business practices are harming Apple and the entire industry. They supply us with a single connectivity component, but for years have been demanding a percentage of the total cost of our products - effectively taxing Apple's innovation."

Apple actually drew the support of companies like Google parent Alphabet, Facebook, Amazon and Microsoft, which said the ban would hurt customers. Intel also criticized the suit as harmful to competition. Qualcomm said the critics of its lawsuit are misdirecting the ITC, and that the lawsuit wasn't about its competition with Intel. 

Updated at 2:35 p.m. PT: To include a response from Apple. 

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