Qualcomm Didn't Have The Sufficient Power To Hurt Competition, An Expert Testified

Dhir Acharya - Jan 23, 2019

On Tuesday, a Qualcomm expert took her turn to testify the case, defending Qualcomm.

Qualcomm didn’t have the power to impact competition in the mobile chip market, according to the testimony from Qualcomm expert Tasneem Chipty. At the company, Chipty specializes in competition policy and antitrust economics, she also runs her own consulting firm, Matrix Economics based in Boston.

On Tuesday, Chipty testified to the US Justice Department, saying when strong MediaTek chips hit the market or Intel won business with Apple, the company did a few things like cutting down on chip prices to win business. But that doesn’t mean it was anticompetitive. She claimed that the chip maker is not powerful enough to force phone makers into a situation where it would take billions of dollars from them.

According to Chipty, in fact, between 2014 and 2017, Qualcomm lost 50 points of market share while other competitors like Samsung, Huawei, Intel, and MediaTek have been getting points. Chipty added that in 2018, flagships of Apple and Huawei chose other companies’ processors instead of Qualcomm and Samsung bought its modems for only 35 percent of its handsets.

Regarding Apple, Chipty said there was competitive pressure from Intel, so the company had to innovate and cut down its prices.

Last week, Apple executive Matthias Sauer testified that in 2014, though Intel couldn’t meet Apple’s technology standards, it chose to use Intel’s modems and chips because Qualcomm would not give incentives for Apple to stay.

Apple said it had to go with Intel because Qualcomm didn't offer incentives

In her conclusion, Chipty stated that an FTC expert didn’t incorporate the term “competition” into his definition of market power appropriately, that he exaggerated the market power of the company, and the agreements between Apple and Qualcomm were based on legitimate business reasons without negative impact on competition.

The battle between Qualcomm and the Federal Trade Commission has been going on in the courtroom, San Jose, California, since January 4. Last week, the Commission completed its case against the chipmaker, and since then the chip maker has been defending against FTC’s accusations.