US DOJ requests hearing on remedies in Qualcomm antitrust case, cites concern over 5G roll...

Posted:
in General Discussion edited May 2
The U.S. Department of Justice in a filing on Thursday preemptively requested a hearing on potential remedies should Qualcomm be found liable in an antitrust case leveled by the Federal Trade Commission.

Qualcomm 5GQualcomm 5G hardware.


In its statement of interest filing, lodged with the U.S. District Court for the Northern District of California, the DOJ's antitrust division asked Judge Lucy Koh to hold a hearing on punishments to be doled out to Qualcomm in the case that the chipmaker's licensing practices are found to violate antitrust laws, reports Reuters.

According to the filing, remedies "should work as little injury as possible to other public policies," wording that suggests concern over potential interference with key American markets. The DOJ goes on to name 5G networking as a sticking point.

Qualcomm is a leader in the development and manufacture of baseband chips, or cellular modems, used in smartphones around the world and is currently ramping up 5G module production as the world shifts to faster wireless technology. Carriers are already switching on the speedy tech in certain markets, though wide access is not anticipated until 2020 or 2021.

If Koh finds in favor of the FTC, too broad a punishment could hamper Qualcomm -- and America's -- standing in the race to 5G.

"[T]here 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 Justice Department said. "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 FTC first leveled antitrust claims against Qualcomm in 2017, alleging the firm sought to maintain a monopoly over the wireless modem market through onerous patent licensing practices. A subsequent trial kicked off in January and included testimony from industry heavyweights including Apple COO Jeff Williams.

Koh has yet to render a judgment on the proceedings that ended Jan. 30. In the interim, Qualcomm and the FTC continue to negotiate a potential settlement.

Alongside with the FTC complaint, Apple filed its own case against Qualcomm on nearly identical allegations. That lawsuit morphed into a legal battle that raged in courts around the world until a surprise settlement was reached in April.

Terms of the agreement involved a one-time Apple payment to Qualcomm (now known to be worth at least $4.5 billion), a multiyear chipset supply agreement and a six-year licensing agreement with a two-year option to extend.

Like most of the industry, Apple's plans for a 5G iPhone rest in Qualcomm's hands. When the Apple v. Qualcomm settlement was announced, Apple's existing modem supplier, Intel, announced an abrupt exit to the 5G smartphone business, leaving Qualcomm as the only way forward. While Intel will provide 4G modems for 2019, Qualcomm is expected to handle iPhone's cellular connectivity hardware in 2020. Apple is said to be working on its own 5G modem, but the solution is rumored to arrive in 2021 at the earliest.

Comments

  • Reply 1 of 13
    mac_dogmac_dog Posts: 689member
    Here we go again. If found guilty, a slap on the wrist and they can go about their business. 
  • Reply 2 of 13
    avon b7avon b7 Posts: 3,946member
    I wonder what those 'public policies' are?

    As for the potential of 'harming competition', this simply isn't possible. There are more than enough players to guarantee competition.

  • Reply 3 of 13
    carnegiecarnegie Posts: 726member
    So... political appointees have stepped in.

    They knew the FTC lawyers had too strong a case to force them to drop it. Perhaps this is a way of putting some (more?) pressure on them to encourage them to settle with Qualcomm on more Qualcomm-agreeable terms. In the wake of the Qualcomm - Apple settlement, a settlement in this case wouldn't surprise me.
  • Reply 4 of 13
    avon b7 said:
    I wonder what those 'public policies' are?

    As for the potential of 'harming competition', this simply isn't possible. There are more than enough players to guarantee competition.

    You're looking at "harming competition" in the wrong way.  The DOJ doesn't care if there are enough players to guarantee competition that keeps pricing in line and innovation at the forefront.  The DOJ cares about the competition primarily being Chinese and Korean.  They don't want the US 5G infrastructure and hardware to be supplied by foreign based companies.  It's akin to the government's concern about Huawei supplying server components.  They'd also prefer that Qualcomm's tech supplies the rest of the developed world as well, cuz we're all connected.   The DOJ doesn't want Qualcomm harmed by a negative outcome to the point of hindering their development and deployment of 5G tech.  So anything Judge Koh can do to lessen the impact... ya know, greater good and all that.
    edited May 3
  • Reply 5 of 13
    gatorguygatorguy Posts: 20,755member
    carnegie said:
    So... political appointees have stepped in.

    They knew the FTC lawyers had too strong a case to force them to drop it. Perhaps this is a way of putting some (more?) pressure on them to encourage them to settle with Qualcomm on more Qualcomm-agreeable terms. In the wake of the Qualcomm - Apple settlement, a settlement in this case wouldn't surprise me.
    So the DoJ may influence the case afterall. BTW isn't the FTC also headed by political appointees who "stepped in" to file the case perhaps prompted by loud Apple complaints? It would not be surprising to me that it may be Apple themselves using a bit of their enormous clout to soften any potential "cures" as part of their negotiations with QC on a license. 
    edited May 3
  • Reply 6 of 13
    carnegiecarnegie Posts: 726member
    gatorguy said:
    carnegie said:
    So... political appointees have stepped in.

    They knew the FTC lawyers had too strong a case to force them to drop it. Perhaps this is a way of putting some (more?) pressure on them to encourage them to settle with Qualcomm on more Qualcomm-agreeable terms. In the wake of the Qualcomm - Apple settlement, a settlement in this case wouldn't surprise me.
    So the DoJ may influence the case afterall. BTW isn't the FTC also headed by political appointees? 
    The DoJ could influence the case, sure. It could influence a lot of cases which it hasn't itself brought. It could, e.g., file a §517 Statement of Interest as it has now done in this case. Or it could, in theory, try to put pressure on the people handling cases to pursue desirable courses of action.

    And, yes, the FTC is headed by political appointees. I didn't suggest otherwise. I was distinguishing between political appointees and the lawyers actually handling the case.
  • Reply 7 of 13
    avon b7avon b7 Posts: 3,946member
    At this stage It definitely looks far too 'political with vested interests' than a cold objective assessment of the situation without external influence'.

    My thinking falls in line with everyone who has posted so far but my understanding of the US system is basically zero so it is simply an uninformed view from afar.

    Nevertheless, from the outside it doesn't look very nice.
  • Reply 8 of 13
    gatorguygatorguy Posts: 20,755member
    carnegie said:
    gatorguy said:
    carnegie said:
    So... political appointees have stepped in.

    They knew the FTC lawyers had too strong a case to force them to drop it. Perhaps this is a way of putting some (more?) pressure on them to encourage them to settle with Qualcomm on more Qualcomm-agreeable terms. In the wake of the Qualcomm - Apple settlement, a settlement in this case wouldn't surprise me.
    So the DoJ may influence the case afterall. BTW isn't the FTC also headed by political appointees? 
    The DoJ could influence the case, sure. It could influence a lot of cases which it hasn't itself brought. It could, e.g., file a §517 Statement of Interest as it has now done in this case. Or it could, in theory, try to put pressure on the people handling cases to pursue desirable courses of action.

    And, yes, the FTC is headed by political appointees. I didn't suggest otherwise. I was distinguishing between political appointees and the lawyers actually handling the case.
    The lawyers only work at the behest of those political appointees. They are not independent. 

    Anyway, isn't it certainly plausible that Apple has made known a preference that the FTC case be minimized by using various political appointees to do so? The intent of the settlement was that all existing lawsuits between the two be dismissed and while this was not technically one of those it was certainly heavily affected by Apple.
  • Reply 9 of 13
    carnegiecarnegie Posts: 726member
    avon b7 said:
    At this stage It definitely looks far too 'political with vested interests' than a cold objective assessment of the situation without external influence'.

    My thinking falls in line with everyone who has posted so far but my understanding of the US system is basically zero so it is simply an uninformed view from afar.

    Nevertheless, from the outside it doesn't look very nice.
    Well, without getting into or judging the political considerations which might have motivated this action, the DoJ is essentially telling the court that it should consider the bigger picture when deciding what remedies (if any) to impose. And it's asking the court, if it finds that Qualcomm did violate the law, to hold an evidentiary hearing about the remedies which should be imposed in light of broader considerations.

    I don't think there's necessarily something wrong with the DoJ asking for that. And it's certainly allowed by our laws. We have a specific law (28 USC §517) empowering the DoJ to file this kind of statement of interest in pretty much any court case heard in the United States.
    pscooter63
  • Reply 10 of 13
    carnegiecarnegie Posts: 726member
    gatorguy said:
    carnegie said:
    gatorguy said:
    carnegie said:
    So... political appointees have stepped in.

    They knew the FTC lawyers had too strong a case to force them to drop it. Perhaps this is a way of putting some (more?) pressure on them to encourage them to settle with Qualcomm on more Qualcomm-agreeable terms. In the wake of the Qualcomm - Apple settlement, a settlement in this case wouldn't surprise me.
    So the DoJ may influence the case afterall. BTW isn't the FTC also headed by political appointees? 
    The DoJ could influence the case, sure. It could influence a lot of cases which it hasn't itself brought. It could, e.g., file a §517 Statement of Interest as it has now done in this case. Or it could, in theory, try to put pressure on the people handling cases to pursue desirable courses of action.

    And, yes, the FTC is headed by political appointees. I didn't suggest otherwise. I was distinguishing between political appointees and the lawyers actually handling the case.
    The lawyers only work at the behest of those political appointees. They are not independent. 

    Anyway, isn't it certainly plausible that Apple has made known a preference that the FTC case be minimized by using various political appointees to do so? The intent of the settlement was that all existing lawsuits between the two be dismissed and while this was not technically one of those it was certainly heavily affected by Apple.
    Of course the lawyers work for the agency. I'm not sure what point you're trying to make. The distinction I was alluding to was between the lawyers handing cases, and making decisions based on what's justified by the cases themselves, and political appointees stepping in and trying to steer particular cases in particular directions based on political (or broader) considerations. In depends on the context, of course, but the latter is generally not desired.

    As for Apple, I don't think it would have an interest in trying to see the effects of the FTC case minimized. It might not be as interested in seeing significant sanctions imposed on Qualcomm as it would likely have been before. So its motivation to assist the FTC's case might be diminished, but at this point I don't see that there would be practical effects from that diminished motivation. At the same time, I don't see Apple pushing the FTC to be more aggressive. Its agreement with Qualcomm may have included a general understanding that it wouldn't do that. Apple may have assured Qualcomm, e.g., that if Qualcomm was able to reach an agreement with the FTC on the terms of a possible settlement, Apple wouldn't express opposition to it.
  • Reply 11 of 13
    gatorguygatorguy Posts: 20,755member
    carnegie said:
    gatorguy said:
    carnegie said:
    gatorguy said:
    carnegie said:
    So... political appointees have stepped in.

    They knew the FTC lawyers had too strong a case to force them to drop it. Perhaps this is a way of putting some (more?) pressure on them to encourage them to settle with Qualcomm on more Qualcomm-agreeable terms. In the wake of the Qualcomm - Apple settlement, a settlement in this case wouldn't surprise me.
    So the DoJ may influence the case afterall. BTW isn't the FTC also headed by political appointees? 
    The DoJ could influence the case, sure. It could influence a lot of cases which it hasn't itself brought. It could, e.g., file a §517 Statement of Interest as it has now done in this case. Or it could, in theory, try to put pressure on the people handling cases to pursue desirable courses of action.

    And, yes, the FTC is headed by political appointees. I didn't suggest otherwise. I was distinguishing between political appointees and the lawyers actually handling the case.
    The lawyers only work at the behest of those political appointees. They are not independent. 

    Anyway, isn't it certainly plausible that Apple has made known a preference that the FTC case be minimized by using various political appointees to do so? The intent of the settlement was that all existing lawsuits between the two be dismissed and while this was not technically one of those it was certainly heavily affected by Apple.
    Of course the lawyers work for the agency. I'm not sure what point you're trying to make. The distinction I was alluding to was between the lawyers handing cases, and making decisions based on what's justified by the cases themselves, and political appointees stepping in and trying to steer particular cases in particular directions based on political (or broader) considerations. In depends on the context, of course, but the latter is generally not desired.

    As for Apple, I don't think it would have an interest in trying to see the effects of the FTC case minimized.  Its agreement with Qualcomm may have included a general understanding that it wouldn't do that. Apple may have assured Qualcomm, e.g., that if Qualcomm was able to reach an agreement with the FTC on the terms of a possible settlement, Apple wouldn't express opposition to it.
    So we're in the same chapter if not on the same page. I think this, you think that, but both agreeing that Apple exerting some influence over the FTC case may well have been involved in negotiating the licensing agreement. 
  • Reply 12 of 13
    carnegiecarnegie Posts: 726member
    gatorguy said:
    carnegie said:
    gatorguy said:
    carnegie said:
    gatorguy said:
    carnegie said:
    So... political appointees have stepped in.

    They knew the FTC lawyers had too strong a case to force them to drop it. Perhaps this is a way of putting some (more?) pressure on them to encourage them to settle with Qualcomm on more Qualcomm-agreeable terms. In the wake of the Qualcomm - Apple settlement, a settlement in this case wouldn't surprise me.
    So the DoJ may influence the case afterall. BTW isn't the FTC also headed by political appointees? 
    The DoJ could influence the case, sure. It could influence a lot of cases which it hasn't itself brought. It could, e.g., file a §517 Statement of Interest as it has now done in this case. Or it could, in theory, try to put pressure on the people handling cases to pursue desirable courses of action.

    And, yes, the FTC is headed by political appointees. I didn't suggest otherwise. I was distinguishing between political appointees and the lawyers actually handling the case.
    The lawyers only work at the behest of those political appointees. They are not independent. 

    Anyway, isn't it certainly plausible that Apple has made known a preference that the FTC case be minimized by using various political appointees to do so? The intent of the settlement was that all existing lawsuits between the two be dismissed and while this was not technically one of those it was certainly heavily affected by Apple.
    Of course the lawyers work for the agency. I'm not sure what point you're trying to make. The distinction I was alluding to was between the lawyers handing cases, and making decisions based on what's justified by the cases themselves, and political appointees stepping in and trying to steer particular cases in particular directions based on political (or broader) considerations. In depends on the context, of course, but the latter is generally not desired.

    As for Apple, I don't think it would have an interest in trying to see the effects of the FTC case minimized.  Its agreement with Qualcomm may have included a general understanding that it wouldn't do that. Apple may have assured Qualcomm, e.g., that if Qualcomm was able to reach an agreement with the FTC on the terms of a possible settlement, Apple wouldn't express opposition to it.
    So we're in the same chapter if not on the same page. I think this, you think that, but both agreeing that Apple exerting some influence over the FTC case may well have been involved in negotiating the licensing agreement. 
    I think it's possible that Apple essentially agreed to stand down with regard to the FTC case. But I doubt Apple would be actively lobbying on Qualcomm's behalf, with regard to the FTC case, as a result of the settlement.

    I also don't think that would have been an important issue in the settlement negotiations. At this point, Apple standing down wouldn't mean much - there isn't much left for it to do (or not do).
  • Reply 13 of 13
    gatorguygatorguy Posts: 20,755member
    carnegie said:
    gatorguy said:
    carnegie said:
    gatorguy said:
    carnegie said:
    gatorguy said:
    carnegie said:
    So... political appointees have stepped in.

    They knew the FTC lawyers had too strong a case to force them to drop it. Perhaps this is a way of putting some (more?) pressure on them to encourage them to settle with Qualcomm on more Qualcomm-agreeable terms. In the wake of the Qualcomm - Apple settlement, a settlement in this case wouldn't surprise me.
    So the DoJ may influence the case afterall. BTW isn't the FTC also headed by political appointees? 
    The DoJ could influence the case, sure. It could influence a lot of cases which it hasn't itself brought. It could, e.g., file a §517 Statement of Interest as it has now done in this case. Or it could, in theory, try to put pressure on the people handling cases to pursue desirable courses of action.

    And, yes, the FTC is headed by political appointees. I didn't suggest otherwise. I was distinguishing between political appointees and the lawyers actually handling the case.
    The lawyers only work at the behest of those political appointees. They are not independent. 

    Anyway, isn't it certainly plausible that Apple has made known a preference that the FTC case be minimized by using various political appointees to do so? The intent of the settlement was that all existing lawsuits between the two be dismissed and while this was not technically one of those it was certainly heavily affected by Apple.
    Of course the lawyers work for the agency. I'm not sure what point you're trying to make. The distinction I was alluding to was between the lawyers handing cases, and making decisions based on what's justified by the cases themselves, and political appointees stepping in and trying to steer particular cases in particular directions based on political (or broader) considerations. In depends on the context, of course, but the latter is generally not desired.

    As for Apple, I don't think it would have an interest in trying to see the effects of the FTC case minimized.  Its agreement with Qualcomm may have included a general understanding that it wouldn't do that. Apple may have assured Qualcomm, e.g., that if Qualcomm was able to reach an agreement with the FTC on the terms of a possible settlement, Apple wouldn't express opposition to it.
    So we're in the same chapter if not on the same page. I think this, you think that, but both agreeing that Apple exerting some influence over the FTC case may well have been involved in negotiating the licensing agreement. 
    I think it's possible that Apple essentially agreed to stand down with regard to the FTC case. But I doubt Apple would be actively lobbying on Qualcomm's behalf, with regard to the FTC case, as a result of the settlement
    ..and I would not doubt that in the background they are, something IMO QC would have insisted on. 
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