A 2019 antitrust ruling against mobile chipmaking giant Qualcomm has been thrown out by a U.S. appeals court. The ruling is a major setback for the Federal Trade Commission, which had accused the hardware maker of abusing its market power with excessive licensing costs.
“Qualcomm is under no antitrust duty to license rival chip suppliers,” the appeals court ruling notes.
In May 2019, U.S. District Judge Lucy Koh ruled that Qualcomm’s licensing fees were “unreasonably high” and she ordered the firm to renegotiate its agreements with phone makers and without threatening to cut off access to Qualcomm’s technology. As part of the ruling, the FTC was to have monitored Qualcomm’s business practices for 7 years.
Qualcomm appealed the ruling a week later, citing “serious legal questions” and that it had invested over $57 billion, or about 20 percent of its annual revenues each year, in the technologies it licenses to others.
“Qualcomm is the developer and enabler of foundational technologies for the wireless industry,” the firm noted at the time. “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.”
In an interesting development, the U.S. Department of Justice backed Qualcomm’s appeal, arguing that the original ruling could undermine U.S. leadership 5G wireless networks and other emerging technologies.
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