Qualcomm Wins Appeal in Antitrust Battle With FTC
Qualcomm has won an appeal with the federal court regarding an alleged violation of antitrust law against the Federal Trade Commission. The FTC had claimed in 2019 that Qualcomm had violated antitrust laws and should renegotiate its licensing deals worth billions of dollars with various smartphone manufacturers including the likes of Apple and Samsung.
These licenses bring in around $4.6 billion in annual revenue for Qualcomm and would have had a major impact on the company's business. The court ruling has dismissed FTC's order for Qualcomm to redo its licensing deals. The stock market has reacted positively to this decision, with Qualcomm's share price climbing by 2.3% by the close of the day's trading.
The Federal Trade Commission (FTC) is not happy with the ruling and will be considering its options, as per a statement by FTC Bureau of Competition Director Ian Conner. FTC could go to the full appeals court for the ruling to be reconsidered.
Meanwhile, Don Rosenberg, executive vice president and general counsel for Qualcomm said:
“The court of appeals unanimous reversal, entirely vacating the district court decision, validates our business model and patent licensing program and underscores the tremendous contributions that Qualcomm has made to the industry."
In 2019, District Judge Lucy Koh had ruled in California that Qualcomm was charging high licensing fees to phone makers and hurting competition. This was the ruling that Qualcomm appealed against. The company claimed that its licensing deals help the industry and does not hurt the competition as it charges a percentage of the selling price of each handset that uses its tech.
The case was first filed by the FTC in 2017 and has been going on since then. The U.S. Justice Department has also played a role and considered Lucy Koh's ruling as hurtful to Qualcomm's American leadership when it comes to competition in 5G networking.
Qualcomm also faces antitrust cases in Korea and Taiwan so the United States is not the only place where it faces trial. The company claims that the cases have been filed by companies who want an upper hand when negotiating deals with the company.
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