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Apple sanctioned in Qualcomm FTC case

A judge granted sanctions against Apple Inc. for dragging its feet in turning over documents in the Federal Trade Commission’s lawsuit accusing Qualcomm Inc. of forcing the iPhone maker to use its chips exclusively.

U.S. Magistrate Judge Nathanael Cousins in San Jose, California, ordered Apple to pay $25,000 for each day that it fails to produce the evidence starting Dec. 16, a penalty equal to the profit the iPhone maker generated every 16 seconds in the last fiscal year. Apple has until Dec. 29 to turn over the documents or face even steeper fines, according to a court filing late Thursday.

Apple, which isn’t a party in the FTC suit, said in a filing this month that it had produced more than 2.6 million documents by the Dec. 15 deadline and any dispute Qualcomm wanted to raise was premature. The FTC suit alleges that Qualcomm unfairly cut out competitors by making Apple use only its chips in exchange for lower licensing fees.

“We have already produced millions of documents for this case and are working hard to deliver the millions more which have been requested in an unprecedented time frame,” Apple spokesman Josh Rosenstock said. “We plan to appeal this ruling.”

Apple filed its own lawsuit several days after the FTC complaint, accusing Qualcomm of monopolizing the market for chips and wireless devices.

Qualcomm investors and management are on the look out for any signs of a breakthrough in the flood of legal disputes and regulatory actions the company is facing.

The pile-up of cases and actions and the suspension of licensing payments by Apple has hurt Qualcomm’s stock this year. That contributed to making it a takeover target by rival Broadcom Ltd., which is pursuing a $105 billion hostile takeover.

The case is FTC v. Qualcomm, 5:17-CV-00220, U.S. District Court, Northern District (San Jose).

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