Qualcomm launches global antitrust offensive against Arm, accusing it of stifling competition

Qualcomm has launched a global antitrust offensive against Arm Holdings, accusing its longtime partner of anti-competitive practices in regulatory complaints filed across three continents. This escalating legal battle marks a significant shift in the relationship between two of the most influential players in the semiconductor industry.

The unprecedented legal offensive spans three continents, with Qualcomm filing complaints with the European Commission, US Federal Trade Commission, and Korea Fair Trade Commission, reported Bloomberg.

The dispute threatens to upend the global technology supply chain, potentially impacting billions of devices — from smartphones and laptops to AI-driven systems and data center infrastructure. At stake is the future of semiconductor intellectual property licensing, with potential ripple effects including increased costs for manufacturers and consumers, as well as heightened uncertainty across an industry that relies heavily on Arm’s processor designs.

A shifting semiconductor landscape

The dispute centers on Arm’s shift from an open licensing model — under which chipmakers like Qualcomm could develop custom processors based on Arm’s designs — to a more restrictive approach favoring its own chip products. Qualcomm argues that this move threatens competition in the semiconductor industry, which has relied on Arm’s technology for over two decades.

The chipmaker argues that Arm is undermining the competitive ecosystem it previously cultivated by pursuing its own chipmaking ambitions.

Arm has received the EU complaint and preparing to respond, the report added.

The report also said that Qualcomm met with US Federal Trade Commission officials in Washington earlier this year to discuss its concerns. The company has accused Arm of withholding critical technology that should be provided under existing license agreements.

Additionally, Qualcomm has raised similar concerns with South Korea’s antitrust regulator, the report added citing people familiar with the development.

The dispute emerges against the backdrop of Arm’s recent strategic pivot, including its controversial decision to design and sell server chips directly to Meta — a move that has already disrupted traditional industry dynamics.

As Arm continues to push forward with its strategic vision — including its direct chip design efforts — the stakes have never been higher in this high-stakes technological chess match.

“Arm remains focused on enhancing innovation, promoting competition, and respecting contractual rights and obligations. Any allegation of anti-competitive conduct is nothing more than a desperate attempt by Qualcomm to detract from the merits and expand the parties’ ongoing commercial dispute for its own competitive benefit. Arm is confident that it will ultimately prevail in this dispute,” an Arm spokesperson said.

Qualcomm did not comment on the development.

Market dynamics and technological shifts

At the heart of the conflict lies Arm’s instruction set architecture — the fundamental code enabling software communication with processors. Qualcomm’s challenge extends beyond immediate commercial interests, potentially questioning the very mechanisms of technological licensing and intellectual property management in the semiconductor sector.

The complaints come as regulators worldwide scrutinize the evolving dynamics of the semiconductor market. Arm, which is majority-owned by Japan’s SoftBank, licenses its processor architecture to a vast ecosystem of chipmakers, including Apple and MediaTek.

However, under CEO Rene Haas, the company has moved toward offering more complete chip designs, competing directly with some of its own customers. That move signaled a dramatic shift from Arm’s traditional role as a neutral technology licensing company to a direct competitor in the semiconductor market.

This strategic repositioning has fundamentally altered the company’s relationship with long-standing partners like Qualcomm, Nvidia, and Apple.

However, both companies are maneuvering to capitalize on the expanding computing market, particularly in AI and high-performance computing. The smartphone chip market — previously a primary revenue source — has become increasingly saturated, pushing companies to seek new growth opportunities.

Arm’s response to the allegations has been robust and devoid of any wrongdoing. The company stated it remains “focused on enhancing innovation, promoting competition, and respecting contractual rights and obligations,” characterizing Qualcomm’s complaints as “a desperate attempt to detract from the merits” of their ongoing commercial dispute, the report added.

Potential industry ramifications

The ongoing legal and regulatory battles between Qualcomm and Arm highlight broader tensions in the semiconductor industry, particularly as companies position themselves to capitalize on growing demand for computing chips beyond smartphones. AI, data centers, and enterprise computing are emerging as key battlegrounds, with chipmakers vying for market dominance.

Both companies have a history of regulatory challenges. Qualcomm, which previously faced scrutiny over its own licensing practices, has largely prevailed in antitrust cases, including a high-profile appeal against the FTC. Meanwhile, Arm is under pressure to sustain growth following its failed acquisition by Nvidia in 2022 and its subsequent public listing.

With court-ordered mediation talks scheduled and multiple regulatory investigations underway, the technology industry will be watching closely. The outcome could significantly reshape the semiconductor landscape, influencing how chip design companies interact with their customers and compete in an increasingly complex market.