FTC drops Qualcomm antitrust lawsuit, ends four-year saga
The U.S. Federal Trade Commission on Monday said it will abandon its long-running antitrust lawsuit against Qualcomm and has no plans to seek a Supreme Court review of a federal appeals court ruling in favor of the chipmaker.
The decision not to move forward with the case caps off a four-year saga in which the federal government sought to prove that Qualcomm abused its dominant position in the chipmaking industry to extract exorbitant licensing fees from cellphone manufacturers.
As reported by Bloomberg, FTC Acting Chairwoman Rebecca Kelly Slaughter in a statement said she agreed with an initial trial court ruling that found Qualcomm unlawfully suppressed competition, but claims the FTC faces "significant headwinds" to overturn a subsequent appeal.
"The FTC's staff did an exceptional job presenting the case, and I continue to believe that the district court's conclusion that Qualcomm violated the antitrust laws was entirely correct and that the court of appeals erred in concluding otherwise," Slaughter said. "Now more than ever, the FTC and other law enforcement agencies need to boldly enforce the antitrust laws to guard against abusive behavior by dominant firms, including in high-technology markets and those that involve intellectual property."
Charges were first leveled in 2017 when the FTC accused Qualcomm of foisting unfair wireless chip licensing provisions on Apple. Judge Lucy Koh subsequently found Qualcomm in violation of antitrust law in 2019. The jurist attached a number of remedial actions to her ruling including a restructuring of licensing agreements and a modification of the company's stance on licensing terms.
Qualcomm successfully appealed Koh's decision last August, arguing that its licensing strategy drove acceleration and improvement within the smartphone modem industry and was therefore beneficial to the market.
Apple was among the companies allegedly impacted by Qualcomm's actions, and in testimony called the chipmaker's demands "onerous."
The tech giant was also embroiled in litigation against the chipmaker over similar issues, though the sprawling court battle between the two companies was ultimately settled in 2019. As part of the deal, Apple paid Qualcomm between $4.5 billion and $4.7 billion, and entered into a six-year chip licensing agreement for iPhone and iPad modems.
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The decision not to move forward with the case caps off a four-year saga in which the federal government sought to prove that Qualcomm abused its dominant position in the chipmaking industry to extract exorbitant licensing fees from cellphone manufacturers.
As reported by Bloomberg, FTC Acting Chairwoman Rebecca Kelly Slaughter in a statement said she agreed with an initial trial court ruling that found Qualcomm unlawfully suppressed competition, but claims the FTC faces "significant headwinds" to overturn a subsequent appeal.
"The FTC's staff did an exceptional job presenting the case, and I continue to believe that the district court's conclusion that Qualcomm violated the antitrust laws was entirely correct and that the court of appeals erred in concluding otherwise," Slaughter said. "Now more than ever, the FTC and other law enforcement agencies need to boldly enforce the antitrust laws to guard against abusive behavior by dominant firms, including in high-technology markets and those that involve intellectual property."
Charges were first leveled in 2017 when the FTC accused Qualcomm of foisting unfair wireless chip licensing provisions on Apple. Judge Lucy Koh subsequently found Qualcomm in violation of antitrust law in 2019. The jurist attached a number of remedial actions to her ruling including a restructuring of licensing agreements and a modification of the company's stance on licensing terms.
Qualcomm successfully appealed Koh's decision last August, arguing that its licensing strategy drove acceleration and improvement within the smartphone modem industry and was therefore beneficial to the market.
Apple was among the companies allegedly impacted by Qualcomm's actions, and in testimony called the chipmaker's demands "onerous."
The tech giant was also embroiled in litigation against the chipmaker over similar issues, though the sprawling court battle between the two companies was ultimately settled in 2019. As part of the deal, Apple paid Qualcomm between $4.5 billion and $4.7 billion, and entered into a six-year chip licensing agreement for iPhone and iPad modems.
Stay on top of all Apple news right from your HomePod. Say, "Hey, Siri, play AppleInsider," and you'll get latest AppleInsider Podcast. Or ask your HomePod mini for "AppleInsider Daily" instead and you'll hear a fast update direct from our news team. And, if you're interested in Apple-centric home automation, say "Hey, Siri, play HomeKit Insider," and you'll be listening to our newest specialized podcast in moments.
Comments
Queue Qualcomm Simp coming up....
Trust me Apple is gonna smash QC, M1-chip style.
hmmmm... now that I think about it we’re coming full circle! Didn’t Apple buy Intel’s modem arm? Looks like Apple took what was working and dumped the rest!!
And I could Never figure out why iPhone and Apple watch could be copied by other companies...???
Signed, Barnes&Noble customer
To me post-courtroom it appears Judge Koh had already decided what her finding would be and then tried to shoehorn case-law to support it. The Federal Court of Appeals agreed that the ruling was built on a foundation of sand, and the FTC recognizes they simply don't have arguments strong enough to merit reconsideration.
The case is simply over, with few changes to patent monetization strategies. Companies other than QC still insist on cross-licensing and basing royalties on selling cost (Huawei is the latest to announce both), the definition of FRAND and what it actually requires is still debated, and essential patents still qualify for injunctions depending on circumstance. I don't know that anything in particular was accomplished other than a relatively short-term agreement between QC and Apple being forced on the table. I could of course be missing something significant.
In any event Apple was going their own way no matter the outcome, so the lawsuit didn't change that. IMHO QC and Apple could have been fast friends and Apple would still have dropped them as soon as they could create a chip to replace them. They'll still need to take a license from Qualcomm of course but that's far less expensive than purchasing licensed chips.