U.S. appeals court reverses antitrust ruling against Qualcomm

By Stephen Nellis and Jan Wolfe (Reuters) - A U.S. appeals court on Tuesday reversed a lower court ruling against chip supplier Qualcomm Inc in an antitrust lawsuit brought by the Federal Trade Commission. The U.S.

Reuters August 12, 2020 00:05:44 IST
U.S. appeals court reverses antitrust ruling against Qualcomm

US appeals court reverses antitrust ruling against Qualcomm

By Stephen Nellis and Jan Wolfe

(Reuters) - A U.S. appeals court on Tuesday reversed a lower court ruling against chip supplier Qualcomm Inc in an antitrust lawsuit brought by the Federal Trade Commission.

The U.S. Ninth Circuit Court of Appeals also vacated an injunction that would have required Qualcomm to change its intellectual property licensing practices.

The decision was a major vindication for the San Diego, California-based company, the largest supplier of chips for mobile phones and also a key generator of wireless communications technology.

Qualcomm was fighting a May 2019 decision by U.S. District Judge Lucy Koh in San Jose, California. That judge sided with the FTC, writing that Qualcomm’s practice of requiring phone makers to sign a patent license agreement before selling them chips “strangled competition” and harmed consumers.

The case divided antitrust regulators in the U.S. government, with the Justice Department intervening to file a brief in support of Qualcomm.

Qualcomm shares rose about 4% on the news. They were already up since March lows as the company continued to show growth despite a sluggish smart phone market.

“The court’s ruling is disappointing and we will be considering our options," FTC Bureau of Competition Director Ian Conner said in a statement.

Qualcomm and the Justice Department did not immediately respond to requests for comment.

The antitrust case was the culmination of years of conflict between Qualcomm and smart phone makers, most notably Apple Inc , which supported the FTC's case and mounted a separate antitrust lawsuit against Qualcomm.

The phone makers said Qualcomm was imposing what amounted to a tax on all phones by insisting that manufacturers license its broad patent portfolio regardless of whose chips they chose.

Apple settled its case against Qualcomm in 2018 and signed a license deal and chip supply agreement. Other major phone makers such as Huawei Technologies Co Ltd have also settled disputes with the chip supplier and signed license deals.

Qualcomm argued that the FTC decision, if allowed to stand, would upend its business model and require those deals to be reworked.

In a 3-0 ruling written by Circuit Judge Consuelo Callahan, the appeals court ruled Qualcomm had no duty to license its patents to rival chip suppliers and that it was not anticompetitive to require phone makers to sign a license agreement.

"Instead, these aspects of Qualcomm’s business model are 'chip-supplier neutral' and do not undermine competition in the relevant antitrust markets," Callahan wrote.

The appeals court also ruled that chip supply agreements with Apple in 2011 and 2013 did not foreclose competition in the market for certain types of modems that connect phones to mobile data networks.

(Reporting by Stephen Nellis in San Francisco and Jan Wolfe in Washington; Editing by David Gregorio)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

Greek police clash with protesters in rally against mandatory vaccinations
World

Greek police clash with protesters in rally against mandatory vaccinations

ATHENS (Reuters) - Greek police used teargas and water cannon to disperse people who had gathered in central Athens on Saturday to protest against mandatory COVID-19 vaccinations. More than 4,000 people rallied outside the Greek parliament for a third time this month to oppose mandatory inoculations for some workers, such as healthcare and nursing staff.

Two Turkish soldiers killed in attack in northern Syria
World

Two Turkish soldiers killed in attack in northern Syria

ISTANBUL (Reuters) - Two Turkish soldiers were killed and two were wounded in an attack on their armoured vehicle in northern Syria, and Turkish forces immediately launched retaliatory fire, Turkey's defence ministry said on Saturday. "Our punitive fire against terrorist positions is continuing," the statement on Twitter on said. It did not specify where the attack occurred, but media reports said it was in the al-Bab area.

Brazilians take to streets again to demand Bolsonaro's impeachment
World

Brazilians take to streets again to demand Bolsonaro's impeachment

By Marcelo Rochabrun SAO PAULO (Reuters) - Protesters took to the streets in several Brazilian cities on Saturday to demand the impeachment of far-right President Jair Bolsonaro, whose popularity has fallen in recent weeks amid corruption scandals against the backdrop of the pandemic. This week, news broke that Brazil's defense ministry told congressional leadership that next year's elections would not take place without amending the country's electronic voting system to include a paper trail of each vote. Bolsonaro has suggested several times without evidence that the current system is prone to fraud, allegations that Brazil's government has denied