Judge rules Qualcomm violated federal antitrust laws, orders remedial action

Posted:
in General Discussion edited May 23
In a ruling handed in late Tuesday night, a federal judge ruled Qualcomm unlawfully suppressed competition by abusing its dominant power in the cellular modem business, ordering the firm to change how it negotiates and renegotiated its licensing deals.

Qualcomm's 5G modemQualcomm's 5G modem


The U.S. Federal Trade Commission has won its anti-trust litigation case against Qualcomm. Judge Lucy Koh found the chip maker violated FTC Act ECF No. 1490 and has ordered remedies to do with how the company licenses its modem chips in future.

The full ruling from the U.S. District Court for the Northern District of California runs for some 233 pages, but FOSS Patents' Florian Mueller has highlighted a few salient points. Among the remedies offered by Koh are dictates targeting Qualcomm's dealmaking strategies.

"Qualcomm must not condition the supply of modem chips on a customer's patent license status," says Koh's ruling, "...and 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."

Qualcomm must also make licenses available to modem suppliers "on fair, reasonable and non-discriminatory terms" and it cannot "interfere with the ability of any customer to communicate with a government agency about a potential law enforcement or regulatory matter."

The ruling follows the conclusion of the FTC vs Qualcomm case which had begun in 2017 and concluded this January.

There has been no comment yet from either Qualcomm or from the U.S. Department of Justice which recently requested that Judge Koh's ruling "should work as little injury as possible to other public policies."

This FTC case is similar to the legal battles between Apple and Qualcomm, but those were all abruptly settled earlier this year. Apple's only public comment was Tim Cook saying that their settlement had been importantfor both companies. However, it was later revealed that Apple paid Qualcomm between $4.5 billion and $4.7 billion as part of the settlement.

gilly33
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Comments

  • Reply 1 of 40
    chasmchasm Posts: 1,593member
    VICTORY for what’s right.
    StrangeDaysnetmagewatto_cobra
  • Reply 2 of 40
    bulk001bulk001 Posts: 479member
    Let me fix that first sentence for you ...

    In a ruling handed down late Tuesday, a federal judge ruled Qualcomm unlawfully suppressed competition by abusing its dominant power in the cellular modem business. The court ordered the firm to change how it negotiates and renegotiated its licensing deals ...
    edited May 22 williamlondonairnerdflyingdpmuthuk_vanalingamnetmage
  • Reply 3 of 40
    Maybe sometimes Apple is right, even though they’re huge corporation .
    ronnwatto_cobra
  • Reply 4 of 40
    bulk001 said:
    Let me fix that first sentence for you ...

    In a ruling handed down late Tuesday, a federal judge ruled Qualcomm unlawfully suppressed competition by abusing its dominant power in the cellular modem business. The court ordered the firm to change how it negotiates and renegotiated its licensing deals ...
    No, Qualcomm lost. Thought I would correct that for you. Not a problem, mistakes happen.
  • Reply 5 of 40
    Reenactment from court: 
    {mom vigorously wags finger point at bad kid}
    MOM: "You've been really bad!  I need you to play nice and stop bullying your little friends!  They ha-... DON'T YOU ROLL YOUR EYES AT ME MISTER!!"

    {kid sighs loudly... rolls eyes and yawns}
    {kid farts then giggles}

    MOM: "Q, that's disgusting! {sighs... slowly shakes head}  Go on.  Go outside... and BE NICE. "
    {smacks Q on the butt and tussles his hair}  

    L'il Q: {pounds chest 2x... belches long and loudly... farts again} "Whatever dude"  {grabs magnifying glass to go burn ants}

    Seems Qualcomm really, really, really got punished./s




    edited May 22 muthuk_vanalingam
  • Reply 6 of 40
    felix01felix01 Posts: 245member
    bulk001 said:
    Let me fix that first sentence for you ...

    I didn't have any trouble understanding what AppleInsider meant. 

    Then again, the AppleInsider story was edited at 6:23 am and again at 7:27 am with no end-of-story mention of what was changed. I guess nobody at AI has ever heard of The Associated Press Stylebook which covers, among many other things, ethical journalistic practices.  
    SpamSandwich
  • Reply 7 of 40
    Mike WuertheleMike Wuerthele Posts: 4,635administrator
    felix01 said:
    bulk001 said:
    Let me fix that first sentence for you ...

    I didn't have any trouble understanding what AppleInsider meant. 

    Then again, the AppleInsider story was edited at 6:23 am and again at 7:27 am with no end-of-story mention of what was changed. I guess nobody at AI has ever heard of The Associated Press Stylebook which covers, among many other things, ethical journalistic practices.  
    Yeah, we've heard of it. As you're undoubtedly aware, there are multiple exceptions to change logs in stories. Three of them are 1) This is a breaking story with rapid changes, 2) HTML fixes, 3) Typo eradication. The updates were parts of 1, and absolutely 2 and 3.

    This conversation has concluded. Feel free to re-read the commenting guidelines.
    edited May 22 gatorguyDAalsethradarthekatronnkruegdudecincyteenetmagebeowulfschmidtwatto_cobra
  • Reply 8 of 40
    1st1st Posts: 372member
    Bravo! 
    watto_cobra
  • Reply 9 of 40
    lkrupplkrupp Posts: 7,158member
    So does this ruling in any way affect the deal between Apple and Qualcomm?
    watto_cobra
  • Reply 10 of 40
    lkrupplkrupp Posts: 7,158member
    No fine, no punishment for Qualcomm? Just a “stop doing that” slap on the wrist?
    watto_cobra
  • Reply 11 of 40
    maestro64maestro64 Posts: 4,599member
    Yep, no surprise here and most likely the reason QCOM and Apple settle out of court. With this ruling QOM would not have been in a good position with negotiating deal with Apple.
    watto_cobra
  • Reply 12 of 40
    red oakred oak Posts: 668member
    This will mean (if it holds up) that the deal just done with Apple is illegal and will be renegotiated 

    Back of envelope, could mean a billion year in profit back to Apple.  Plus, will give Apple full runway to develop its own modem chips internally

    #Karma  ❤️
    ronnnetmagewatto_cobra
  • Reply 13 of 40
    maestro64 said:
    Yep, no surprise here and most likely the reason QCOM and Apple settle out of court. With this ruling QOM would not have been in a good position with negotiating deal with Apple.
    Not following the logic here. If this ruling had come first, I feel like Apple would have either gone to trial with new precedent set, or gotten a better deal (if reports are to be believed that the deal was not great for Apple). Still seems more likely to me that Apple, faced with Intel's inability to deliver timely modems (that would be licensed from Qualcomm anyway) and a 5-year ramp up for its own team to work around patents in its internally developed modems, was facing years without 5G in the iPhone which would potentially be devastating as early as Fall of 2020. If Apple had lost its trial, the financial loss could be way worse than if it settled when there were still risks for Qualcomm. There were no options, in other words, but for Apple to give its lunch to the bully.
    edited May 22 gilly33flyingdpwatto_cobra
  • Reply 14 of 40
    wandersowanderso Posts: 104member
    Seems that Apple might have wanted to wait a few more weeks to settle. 
    watto_cobra
  • Reply 15 of 40
    red oakred oak Posts: 668member
    wanderso said:
    Seems that Apple might have wanted to wait a few more weeks to settle. 
    It will take many months to work through the appeals process.  And the outcome is not guaranteed.  Apple needed the chips now 

    But as long as the FTC wins at the end, it will not matter.   The contract will get torn up 
    mwhiteronn1stchasmnetmagewatto_cobra
  • Reply 16 of 40
    red oak said:
    This will mean (if it holds up) that the deal just done with Apple is illegal and will be renegotiated 

    Back of envelope, could mean a billion year in profit back to Apple.  Plus, will give Apple full runway to develop its own modem chips internally

    #Karma  ❤️
    That's a lot of supposition that doesn't make sense and I seriously doubt Appe and QC will be renegotiating their deal.  Wouldn't it be more likely that Apple and QC made their agreement with full understanding that QC could lose the FTC court case?  Wouldn't it be more sensible to think they mutually built their agreement around satisfactory terms for both companies?  Even if (seriously doubt it) they renegotiated, it could be a simple formality that reaffirms the terms they already have... the terms that -from the outside looking in- both parties seem happy to have.

    Why would you think this ruling give's Apple any more leeway to develop their own modem chips than their current deal does?  Regardless, they'd still have to license QC IP even after they made their own chip.  That doesn't go away.  So not karma.  Qualcomm simply can't double dip any more.  This deal could hypothetically end up costing other OEM's even more money.  Renegotiation doesn't automatically mean paying less.  That would be an assumption without basis.

    With the DOJ's influence, Qualcomm seems to have gotten off with a slap on the wrist.  
    edited May 22 muthuk_vanalingamwatto_cobra
  • Reply 17 of 40
    gatorguygatorguy Posts: 20,749member
    red oak said:
    wanderso said:
    Seems that Apple might have wanted to wait a few more weeks to settle. 
    It will take many months to work through the appeals process.  And the outcome is not guaranteed.  Apple needed the chips now 

    But as long as the FTC wins at the end, it will not matter.   The contract will get torn up 
    I don't see that happening. 
    muthuk_vanalingamchasm
  • Reply 18 of 40
    ronnronn Posts: 330member
    gatorguy said:
    red oak said:
    wanderso said:
    Seems that Apple might have wanted to wait a few more weeks to settle. 
    It will take many months to work through the appeals process.  And the outcome is not guaranteed.  Apple needed the chips now 

    But as long as the FTC wins at the end, it will not matter.   The contract will get torn up 
    I don't see that happening. 
    Doesn't the ruling mandate that:

    "...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."

    Which could give Apple a leg up on redoing the contract.
    netmagewatto_cobra
  • Reply 19 of 40
    anantksundaramanantksundaram Posts: 19,223member
    I wonder if Apple settled a few weeks too soon. Perhaps it would have been better to wait for this ruling. 
  • Reply 20 of 40
    ronn said:
    gatorguy said:
    red oak said:
    wanderso said:
    Seems that Apple might have wanted to wait a few more weeks to settle. 
    It will take many months to work through the appeals process.  And the outcome is not guaranteed.  Apple needed the chips now 

    But as long as the FTC wins at the end, it will not matter.   The contract will get torn up 
    I don't see that happening. 
    Doesn't the ruling mandate that:

    "...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."

    Which could give Apple a leg up on redoing the contract.
    Negotiate - From a go-forward perspective.  Renegotiate - if terms were negotiated under bad faith and threats.  There's nothing available that says Apple and QC negotiated their agreement under bad faith or threats.  In fact, there's a fair contingent of AI forum members who insist it was Apple negotiating from a position of strength so the conditions for renegotiation weren't really present.  We don't know so we can't assume.  Regardless, that excerpt you quoted does not mandate renegotiation.
    muthuk_vanalingam
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