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posted by martyb on Monday August 17 2020, @02:32PM   Printer-friendly
from the I-thought-everything-worked-in-theory dept.

Appeals court ruling for Qualcomm "a victory of theory over facts":

A federal appeals court has tossed out a lower court ruling that Qualcomm abused its dominance of the modem chip market to force customers to pay inflated royalties for its patent portfolio. The appeals court forcefully rejected Judge Lucy Koh's 2019 analysis of Qualcomm's business practices and held that Qualcomm's behavior was merely "hypercompetitive," not anticompetitive.

The two rulings could not have been more different. In last year's 233-page ruling, Judge Koh explained Qualcomm's business practices in so much detail that it took us more than 3,500 words just to summarize her findings. This week's ruling by the Ninth Circuit Appeals Court was shorter—56 pages—and more theoretical.

The appeals court acknowledged that "from 2006 to 2016, Qualcomm possessed monopoly power in the CDMA modem chip market, including over 90% of market share." However, the court found that the Federal Trade Commission—which brought the lawsuit against Qualcomm—had failed to prove that Qualcomm had abused that power. The court reasoned that Qualcomm's licensing practices were simply designed to maximize the company's revenue—and that in itself isn't illegal.

"The plaintiff must show that diminished consumer choices and increased prices are the result of a less competitive market due to either artificial restraints or predatory and exclusionary conduct," the appeals court ruled.

Judge Koh thought the FTC had demonstrated predatory and exclusionary conduct. She described how Qualcomm threatened to abruptly cut off the modem chip supply of smartphone makers who challenged Qualcomm's high patent rates. She found Qualcomm structured deals with Apple, Samsung, LG, and other smartphone vendors to discourage them from doing business with other chipmakers. She cited internal documents in which Qualcomm executives acknowledged the anticompetitive impact of these policies.

But three judges from the Ninth Circuit Appeals Court ignored much of this evidence and waved the rest away.

"I would describe it as a victory of theory over facts," said Tim Wu, a legal scholar at Columbia University. Wu told Ars that the Ninth Circuit showed "an indifference to the actual effects" of Qualcomm's conduct.


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  • (Score: 4, Informative) by ikanreed on Monday August 17 2020, @04:03PM (4 children)

    by ikanreed (3164) Subscriber Badge on Monday August 17 2020, @04:03PM (#1037861) Journal

    George W. Bush appointed the writer of the main opinion of the Court, one Consuelo Callahan, and the presiding judge of the appeal, Stephen Murray III.

    Bill Clinton appointed Johnnie B. Rawlinson

    Callahan has two other notable rulings, one that restrictions on high capacity magazines is unconstitutional. And the other was that amazon doesn't have to pay taxes if it doesn't want to.

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  • (Score: 2, Funny) by fustakrakich on Monday August 17 2020, @04:41PM (3 children)

    by fustakrakich (6150) on Monday August 17 2020, @04:41PM (#1037892) Journal

    Bush/Clinton... sounds about right

    --
    La politica e i criminali sono la stessa cosa..
    • (Score: 0) by Anonymous Coward on Monday August 17 2020, @04:43PM (2 children)

      by Anonymous Coward on Monday August 17 2020, @04:43PM (#1037895)

      Yes, both sides. Very much.

      • (Score: 1) by fustakrakich on Monday August 17 2020, @05:04PM (1 child)

        by fustakrakich (6150) on Monday August 17 2020, @05:04PM (#1037914) Journal

        What "both" sides?

        --
        La politica e i criminali sono la stessa cosa..
        • (Score: 0) by Anonymous Coward on Tuesday August 18 2020, @12:35AM

          by Anonymous Coward on Tuesday August 18 2020, @12:35AM (#1038137)

          The Nazis and the Allies. Some very good people, can't we at least agree on that.