FTC rules against Qualcomm, prompting appeal

In a press release yesterday, FTC Bureau of Competition Director Bruce Hoffman issued the following statement regarding the U.S. District Court for the Northern District of California’s ruling yesterday that Qualcomm Inc.’s licensing practices relating to its modem chips violate Sections 1 and 2 of the Sherman Act and constitute an unfair method of competition under the FTC Act: “Yesterday’s decision that Qualcomm’s practices violate the antitrust laws is an important win for competition in a key segment of the economy. FTC staff will remain vigilant in pursuing unilateral conduct by technology firms that harms the competitive process.” The two-year old FTC complaint challenged “Qualcomm’s unlawful maintenance of a monopoly in baseband processors, semiconductor devices that enable cellular communications in cell phones and other products.” It asserted that “Qualcomm has engaged in exclusionary conduct that taxes its competitors’ baseband processor sales, reduces competitors’ ability and incentive to innovate, and raises prices paid by consumers for cell phones and tablets.” The district court decision follows a four-week trial completed in January. In response, Qualcomm issued a statement that it intends to immediately seek a stay of U.S. District Court Judge Lucy H. Koh’s ruling and an expedited appeal to the U.S. Court of Appeals for the 9th Circuit. “We strongly disagree with the judge’s conclusions, her interpretation of the facts and her application of the law,” said Don Rosenberg, executive vice president and general counsel of Qualcomm.