Qualcomm Wins Appeal in Antitrust Suit

Written August 12, 2020

The Ninth Circuit on August 11, 2020, vacated a 2019 ruling that held that Qualcomm was charging phone makers “unreasonably high” licensing fees and thwarting competition. Federal Trade Commission v. Qualcomm Inc., 9th Cir., No. 19-16122.

Qualcomm, the world’s largest maker of smartphone chips, gets the majority of its profit from licensing the patents that underpin how all modern phone systems work.

The Federal Trade Commission (FTC) brought a case against Qualcomm in 2017 accusing the company of anti-competitive practices. In May 2019 the district court ruled against the chipmaker and ordered it to negotiate licensing agreements with customers “in good faith” and without threatening to cut off access to its products.

On appeal, the Ninth Circuit said that the lower court “went beyond the scope” of antitrust law. Further, it said that Qualcomm’s licensing practices aren’t anticompetitive because “Qualcomm is under no antitrust duty to license rival chip suppliers.”