Qualcomm Appeals FTC Antitrust Ruling

Posted on May 29, 2019 by Paul Thurrott in Hardware, Mobile with 8 Comments

Qualcomm has asked a federal judge not to enforce her antitrust ruling against the firm so that it can appeal the case.

“After radically restructuring its business relationships [as would be required by the ruling], Qualcomm will not be able to return to its pre-injunction business in an orderly fashion,” a Qualcomm statement notes. “Nor will it be able to unwind licensing agreements it has renegotiated in the shadow of an order that is later overturned.”

Citing “serious legal questions,” Qualcomm believes it can win an appeal of the dramatic antitrust ruling against it. The case basically hinges on how Qualcomm licenses its intellectual property, including in many cases multiple chipsets, to mobile device makers. The court ruled that Qualcomm’s prices were too high, and that the firm was abusing its monopoly power. But Qualcomm, perhaps unexpectedly, has a different take.

“Qualcomm is the developer and enabler of foundational technologies for the wireless industry,” as a website devoted to its defense explains. “Our inclusive, flexible licensing and mobile technology transfer program ensures rapid technology advancement and competition across the ecosystem. Through standards development and our broad licensing program, we make our breakthroughs available to licensees who use them to develop products.”

According to Qualcomm, it has invested over $57 billion, or about 20 percent of its annual revenues each year, in the technologies it licenses to others. The firm doesn’t keep its inventions, which are covered by over 130,000 patents and patent applications. Instead, it licenses them so that partners can build unique solutions of their own.

“Today, Qualcomm has hundreds of agreements, and more than 11 billion licensed mobile devices have shipped worldwide,” it continues. “Thanks to the Qualcomm team and collaboration within the entire mobile industry, the next generation of wireless, 5G, debuted a year ahead of schedule. Mobile has not only become the world’s largest technology platform, it has achieved that scale faster than any technology in human history. Our technology transfer program works.”

As for the case itself, Qualcomm says it “strongly disagrees” with “irreparably flawed” FTC case, which it says is “lacking any plausible theory of competitive harm.”

“Mobile handset makers repeatedly testified that Qualcomm had the best chips available, while even Intel testified that Qualcomm R&D drives the pace of cellular innovation,” it says. “This is the very essence of competition – innovation and superior products. Contrary to the FTC’s claims, Qualcomm’s licensing model promotes, rather than harms, competition in the mobile chip industry, and more broadly the global mobile industry is thriving and competitive. The agency demonstrated no harm to competition, while other testimony portrayed a chip market that is thriving, dynamic, and innovative with intense competition, declining prices, improved chip performance, and declining Qualcomm market share. Qualcomm looks forward to the opportunity to be heard on appeal.”

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