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US FTC drops anti-trust case against Qualcomm after four-year battle

US FTC drops anti-trust case against Qualcomm

The United States Federal Trade Commission has decided not to pursue the anti-trust case against global chip-maker Qualcomm. The agency also stated that it does not plan on seeking a Supreme Court review of the decision given by the Court of Appeals.

“The FTC will not petition the Supreme Court to review the decision of the Court of Appeals for the Ninth Circuit in FTC v. Qualcomm”, the agency stated.

This decision formally ends litigation that began in 2017 when FTC filed a complaint against Qualcomm accusing Qualcomm of using anti-competitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cellphones and other consumer products. 

The company was accused of forcing manufacturers to pay more than they should for its wireless patents under what the FTC termed as the “no license, no chips” policy. According to FTC, if the companies did not agree to pay its exorbitant license fees, they didn’t get to use Qualcomm’s chips.

In 2019, a judge for the US District Court ruled in favor of FTC but in August 2020, this decision was reversed by a three-judge bench of the US Court of Appeals of the Ninth Circuit. 

In a statement, Rebecca Kelly Slaughter, Acting Chairwoman of the FTC, noted the role that “significant headwinds facing the commission” played in the agency’s decision to not ask the Supreme Court for a review of the Court of Appeals ruling. 

However, Slaughter firmly believes that the 2019 verdict was correct. 

“I continue to believe that the District Court’s conclusion that Qualcomm violated the anti-trust laws was entirely correct and that the Court of Appeals erred in concluding otherwise.”

Slaughter went on to say that there is a need for the FTC and other agencies “to boldly enforce” these laws to guard against “abusive behavior by dominant firms, including high-technology markets and those that involve intellectual property.”

“I am particularly concerned about the potential for anticompetitive or unfair behavior in the context of standard-setting and the FTC will closely monitor conduct in this arena”, she added. 

Qualcomm was happy with the decision of the Court of Appeals. 

Don Rosenberg, Executive Vice President and General Counsel for Qualcomm, while stating that the company was pleased with the decision of the Court of Appeal to reverse the district court’s judgment, stated that “The decision validates our business model and licensing program and underscores the tremendous contributions that Qualcomm has made to the industry.”

“Qualcomm is also very pleased that the full Ninth Circuit Court of Appeals has denied the FTC’s petition for rehearing. This leaves intact the panel’s decision which reversed and vacated the district court ruling in its entirety”.

“The fact that not one judge on the Ninth Circuit thought it necessary to consider the merits of the FTC’s petition to even ask for a response from Qualcomm validates the strength and clarity of the panel’s thorough analysis and conclusions”, Rosenberg said.

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