FTC wins its antitrust case against Qualcomm

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Qualcomm patents
Case could make 5G landscape more competitive.
Photo: Qualcomm

Qualcomm emerged victorious from its recent battle with Apple. But things look a whole lot less rosy for the company in its antitrust case with the Federal Trade Commission (FTC).

Judge Lucy Koh this week filed her ruling in the FTC’s first round of litigation against Qualcomm. She concluded that Qualcomm has been engaging in anticompetitive business practices.

As Apple backing down in its battle with Qualcomm highlighted, Qualcomm is very much a leader in the 5G mobile modem space. Judgements like this will likely help to make this area a more competitive market in the years to come, however.

The FTC brought its antitrust case against Qualcomm in early 2017. It argued that Qualcomm has unlawfully suppressed competition in the mobile chip market. It also accused it of abusing its market-leading position to pull in excessive licensing fees.

What happens next?

Koh suggested five ways that Qualcomm can make good. As per Florian Mueller of FOSS Patents:

“(1) Qualcomm must not condition the supply of modem chips on a customer’s patent license status and Qualcomm must negotiate or renegotiate license terms with customers in good faith under conditions free from the threat of lack of access to or discriminatory provision of modem chip supply or associated technical support or access to software.

(2) Qualcomm must make exhaustive SEP licenses available to modem-chip suppliers on fair, reasonable, and non-discriminatory (“FRAND”) terms and to submit, as necessary, to arbitral or judicial dispute resolution to determine such terms.

(3) Qualcomm may not enter express or de facto exclusive dealing agreements for the supply of modem chips.

(4) Qualcomm may not interfere with the ability of any customer to communicate with a government agency about a potential law enforcement or regulatory matter.

(5) In order to ensure Qualcomm’s compliance with the above remedies, the Court orders Qualcomm to submit to compliance and monitoring procedures for a period of seven (7) years. Specifically, Qualcomm shall report to the FTC on an annual basis Qualcomm’s compliance with the above remedies ordered by the Court.”

It remains to be seen what, if any, impact all of this will have on Apple and Qualcomm’s relationship going forward. After Intel dropped out of the 5G modem race, Apple and Qualcomm inked a long term deal to work together. Huawei had also talked up its 5G chips. But given recent events it seems unlikely that Huawei is going to be making deals with U.S. tech giants any time soon.