from the wonder-how-much-that-decision-cost-Qualcomm dept.
US Appeals Court Reverses Antitrust Ruling in FTC vs Qualcomm
It's been over three years since the United States FTC had charged Qualcomm with antitrust violations over cellular modem patents and business practices. That suit ultimately received a ruling in May of 2019 against Qualcomm, resulting in an injunction for Qualcomm to renegotiate its licensing agreements with its customers. Qualcomm had subsequently appealed the ruling, putting the order on hold, and today, a bit over a year later, the Ninth Circuit Court of Appeals has finally issued an opinion, reversing and vacating the injunction, resulting in a win for Qualcomm at this moment in time.
The appeals court's opinion centres around the FTC's use of anti-trust law to hold Qualcomm accountable for some of its controversial business practices in how it handles licensing of its patent portfolio and its "no license, no chip" mode of operation. The opinion attacks the original judgment in that the arguments presented do not fall under the umbrella of anti-trust law violations, and instead it being a matter of contract and patent law.
Previously: U.S. Federal Trade Commission Sues Qualcomm for Anti-Competitive Practices
US DOJ, Worried About 5G Race, Asks For Hearing If Qualcomm's Declared A Monopoly
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The U.S. FTC is going after Qualcomm:
The Federal Trade Commission filed a complaint in federal district court charging Qualcomm Inc. with using anticompetitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products. Qualcomm is the world's dominant supplier of baseband processors – devices that manage cellular communications in mobile products. The FTC alleges that Qualcomm has used its dominant position as a supplier of certain baseband processors to impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors.
[...] According to the complaint, by threatening to disrupt cell phone manufacturers' supply of baseband processors, Qualcomm obtains elevated royalties and other license terms for its standard-essential patents that manufacturers would otherwise reject. These royalties amount to a tax on the manufacturers' use of baseband processors manufactured by Qualcomm's competitors, a tax that excludes these competitors and harms competition. Increased costs imposed by this tax are passed on to consumers, the complaint alleges. By excluding competitors, Qualcomm impedes innovation that would offer significant consumer benefits, including those that foster the increased interconnectivity of consumer products, vehicles, buildings, and other items commonly referred to as the Internet of Things.
Get in line:
EU Investigates Qualcomm For Antitrust Activities
Qualcomm Faces EU Antitrust Charges Over "Predatory Pricing"
Qualcomm Fined $853 Million by South Korea for Antitrust Violations
Also at Bloomberg and The Verge.
The US Justice Department on Thursday asked for a hearing on Qualcomm's possible punishment if a California judge agrees with the Federal Trade Commission and declares the chipmaker to be a monopoly -- largely because it's worried about competition in 5G.
In a statement of interest filed in US District Court in San Jose, California, the DOJ's antitrust division asked that "in the event that the court finds liability on any of the FTC's claims, the court should order additional briefing and hold a hearing on issues related to a remedy." The DOJ said that the court should carefully consider what remedy to carry out because it's worried about the US' position in the race to 5G.
"There is a plausible prospect that an overly broad remedy in this case could reduce competition and innovation in markets for 5G technology and downstream applications that rely on that technology," the US wrote. "Such an outcome could exceed the appropriate scope of an equitable antitrust remedy. Moreover, it has the distinct potential to harm rather than help competition."
The US stressed, though, that it hasn't taken a position on the merits of the FTC's claims.
Qualcomm declined to comment. The FTC didn't immediately respond to a request for comment.
[...] After years of work on 5G networks, hyped as the life-changing foundation for augmented reality, telemedicine and other tech trends, the super-fast wireless technology is being rolled out. Carriers are turning on their networks, and virtually every major Android handset maker has touted plans to launch a 5G device this year. The vast majority of those devices will use 5G modems from Qualcomm.
