The panel noted that anticompetitive behavior is illegal under federal antitrust law, but that hypercompetitive behavior is not. 2020), is the most consequential government monopolization case since Microsoft. The FTC brings its Complaint against Qualcomm under § 5 of the Federal Trade Commission Act (“FTCA”), which prohibits “[u]nfair methods of competition in or … Federal Trade Commission v. Qualcomm Inc., 411 F. Supp. 4 Complaint at ¶¶ 137-44. In preparation, FTC, Qualcomm, and many interested parties have filed their briefs in support and against the decision by the United States District Court for the Northern District of California (lower court). 3 FTC v. Qualcomm, 19-16122, at 12-15 (9th Cir. 7 On a motion for summary judgment by the FTC, the district court correctly ruled that the relevant FRAND licensing commitments require Qualcomm (and other owners of standard essential patents) to license all comers, including modem chip makers. The FTC alleged that Qualcomm had unlawfully monopolized the market for certain semiconductors important in smartphone technology. The dispute in FTC v. Qualcommcentered on the FTC's allegations regarding Qualcomm's "no license, no chips" policy. In November, Koh granted a partial summary judgement in the FTC’s favor, ruling that Qualcomm must issue licenses to rival chip makers for some of … In January 2017, the FTC filed a complaint in federal court seeking to enjoin Qualcomm's standard essential patent (SEP) licensing practices for certain technology used in wireless communications semiconductor microchips. Among other things, the FTC claimed that Qualcomm used a dominant market position to impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors. Decision Reversing FTC v. Qualcomm August 27, 2020 . Decision Summary Qualcomm’s Monopoly Power At that time, she granted the FTC's motion for partial summary judgment in its suit against Qualcomm. But on August 11, a three-judge panel -- Judge Rawlinson from Nevada, Judge Callahan, and Judge Stephen Murphy, III, who is a U.S. District Court judge from Michigan sitting by designation -- … This article discusses the impact of a recent decision on by Judge Koh in the Northern District of California, on FTC v.Qualcomm Inc., No. The complaint alleged that Qualcomm had unlawfully monopolized two markets for modem chips (also called baseband chips or processors)—semiconductors that, together with other components, allow devices like smartphones and tablets to communicate over cellular networks. Before the Court is the FTC’s motion for partial summary judgment on the issue of whether In an ongoing series of posts by both regular bloggers and guests, Truth on the Market offers analysis of the FTC v.Qualcomm antitrust case. 3d 658 (N.D. Cal. The post argued that the amici failed to convincingly show that Qualcomm’s NLNC policy was exclusionary. On May 21, 2019, the United States District Court for the Northern District of California found that Qualcomm violated the Federal Trade Commission (FTC) Act, … Federal Trade Commission, Plaintiff, v. Qualcomm Incorporated, a Delaware corporation, Defendant. § 45. This article analyses the controversial 233-page decision in FTC v. Qualcomm as well as its potential impact, if the decision is upheld by the Ninth Circuit. We responded to the amici in a first blog post. 1. Dissenting Statement of Commissioner Maureen K. Ohlhausen In the Matter of Qualcomm, Inc. FTC Charges Qualcomm With Monopolizing Key Semiconductor Device Used in Cell Phones. FTC v. Qualcomm: Trial and Possible Implications By Jay Jurata (Orrick Herrington & Sutcliffe) 1. Second… Disclaimer: Justia Annotations is a forum for attorneys to summarize, comment on, and analyze case law published on our site. The affected markets were alleged to be based on the wireless technology they supported: CDMA (3G) and premium-quality L… Nearly two years after the Federal Trade Commission (“FTC”) brought its unfair competition case against Qualcomm, the case has proceeded to trial. This has been a saga of a lot of time and pain. at ¶¶ 8-9, 122-30. Qualcomm licenses its patented technologies to more than 340 companies, particularly to original equipment manufacturers (hereinafter OEMs) such as Apple, Samsung, Motorola. 5 Id. Office of Equal Employment Opportunity and Workplace Inclusion, Reporting Fraud, Waste, Abuse or Mismanagement, What You Need to Know About the Office of the Inspector General, Companies and People Banned From Debt Relief, Statute, Rules and Formal Interpretations, Post-Consummation Filings (HSR Violations), Retrospective Review of FTC Rules and Guides, Other Applications, Petitions, and Requests, Magnuson-Moss Warranty Public Audit Filings, International Technical Assistance Program, Competition & Consumer Protection Authorities Worldwide, Hearings on Competition & Consumer Protection, List a Number on the National Do Not Call Registry, File Documents in Adjudicative Proceedings, Petition of the Federal Trade Commission for Rehearing En Banc in the United States Court of Appeals for the Ninth Circuit (464.96 KB), FTC Requests Rehearing En Banc of Qualcomm Appeals Panel Decision, Federal Trade Commission v. Qualcomm Incorporated (9th Cir. Id. Yesterday, Judge Koh of the U.S. District Court Northern District of California entered a Judgment following the January 2019 trial based on her Findings of Fact and Conclusions of Law that Qualcomm violated the Federal Trade Commission Act. “Anticompetitive behavior is prohibited under the Sherman Act. FTC v. Qualcomm … Judge Koh’s decision followed a 10-day bench trial that ended on January 29, 2019. We notably highlighted two important factors. In January 2017, the FTC sued Qualcomm alleging anticompetitive tactics to maintain a monopoly in the supply of CDMA and premium LTE chips used in cell phones and other consumer products. Docket for Federal Trade Commission v. Qualcomm Incorporated, 5:17-cv-00220 — Brought to you by the RECAP Initiative and Free Law Project, a non-profit dedicated to … On May 21, 2019, Judge Lucy Koh of the US District Court for the Northern District of California issued her decision in the case. In January 2017, the FTC filed an antitrust complaint against Qualcomm in the Northern District of California. Incorporated (“Qualcomm”) states that it has no parent corporation and that no publicly held corporation owns 10% or more of Qualcomm’s stock. US Court of Appeals for the Ninth Circuit. The FTC filed a complaint in federal district court charging Qualcomm Inc. with using anticompetitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products. ), Petition of the FTC for Rehearing En Banc, 19-16122 (532.63 KB), Answering Brief of the Federal Trade Commission in the United States Court of Appeals for the Ninth Circuit (789.64 KB), [Corrected] Opposition of the Federal Trade Commission to Qualcomm’s Motion for Partial Stay Pending Appeal in the United States Court of Appeals for the Ninth Circuit (98.29 KB), United States District Court Order Denying Qualcomm’s Motion for Stay Pending Appeal (123.29 KB), Federal Trade Commission’s Objections to Materials Filed with Qualcomm’s Reply in Support of its Motion for Stay Pending Appeal (34.26 KB), Federal Trade Commission’s Opposition to Qualcomm’s Motion for Stay Pending Appeal (125.3 KB), Statement of Commissioner Rohit Chopra on the Ruling by Judge Lucy Koh in Federal Trade Commission v. Qualcomm Incorporated, Statement by Federal Trade Commission Bureau of Competition Director Bruce Hoffman on District Court Ruling in Agency’s Monopolization Case against Qualcomm, United States District Court Findings of Fact and Conclusions of Law [public redacted version] (1.6 MB), United States District Court Judgment (37.09 KB), Transcript of Federal Trade Commission’s Closing Argument before the United States District Court (266.82 KB), Federal Trade Commission’s Closing Argument Slide Presentation [Public Redacted Version] (7.61 MB), Transcript of Federal Trade Commission’s Opening Statement before the United States District Court (65.9 KB), Federal Trade Commission’s Opening Statement Slide Presentation (Public Redacted Version) (2.18 MB), Federal Trade Commission’s Pretrial Brief [Public Redacted Version as filed January 8, 2019] (221.4 KB), Federal Trade Commission’s Pretrial Proposed Findings of Fact and Conclusions of Law [Public Redacted Version as filed February 20, 2019] (802.4 KB), United States District Court Order Granting Federal Trade Commission’s Motion for Partial Summary Judgment (371.4 KB), Federal Trade Commission’s Reply in Support of Partial Summary Judgment on Qualcomm’s Standard Essential Patent Licensing Commitments [Public Redacted Version] (174.57 KB), Federal Trade Commission’s Motion for Partial Summary Judgment on Qualcomm’s Standard Essential Patent Licensing Commitments and Memorandum of Points and Authorities in Support [Public Redacted Version as filed November 28, 2018] (541.23 KB), Federal Trade Commission’s Opposition to Qualcomm’s Motion to Dismiss [Public Version With Fewer Redactions, As Approved by the United States District Court] (622.38 KB), United States District Court Order and Opinion Denying Qualcomm’s Motion to Dismiss (1.7 MB), Federal Trade Commission’s Opposition To Qualcomm’s Motion To Dismiss [Redacted Public Version of Document Sought To Be Sealed] (674.23 KB), Federal Trade Commission’s Complaint For Equitable Relief [Public Version With Fewer Redactions, As Approved by the United States District Court] (921.69 KB), Federal Trade Commission’s Complaint for Equitable Relief [Redacted Version of Document Sought to be Sealed] (663.1 KB). On August 30, 2018, the FTC moved for partial summary judgment on the question of whether Qualcomm’s commitments to two standard setting organizations (“SSOs”), the Alliance for Telecommunications Industry Solutions (“ATIS”) and the Telecommunications Industry at 44, 128-29, 157. After a at 2. May 21, 2019) {District Court Decision}. The Justice Department took the unusual step of wading into the FTC-Qualcomm case early this month, asking for a hearing on any penalty against Qualcomm in … The panel held that Qualcomm's practice of licensing its standard essential patents (SEPs) exclusively at the original equipment manufacturers (OEM) level does not amount to anticompetitive conduct in violation of section 2 of the Sherman Act, as Qualcomm is under no antitrust duty to license rival chip suppliers; Qualcomm's patent-licensing royalties and "no license, no chips" policy do not impose an anticompetitive surcharge on rivals' modem chip sales; rather, these aspects of Qualcomm's business model are "chip-supplier neutral" and do not undermine competition in the relevant antitrust markets; Qualcomm's 2011 and 2013 agreements with Apple have not had the actual or practical effect of substantially foreclosing competition in the CDMA modem chip market; and because these agreements were terminated years ago by Apple itself, there is nothing to be enjoined. FTC v. Qualcomm. vladeckd@georgetown.edu Counsel for Amici Curiae The Federal Trade Commission (“FTC”) sued Qualcomm in January 2017 for violating Section 5 of the FTC Act. 6 Findings of Fact and Conclusions of Law, FTC v. Qualcomm, 5:17-cv-00220 (N.D. Cal. The panel explained that its role was to assess whether the FTC has met its burden under the rule of reason to show that Qualcomm's practices have crossed the line to "conduct which unfairly tends to destroy competition itself." On August 11, 2020, a Ninth Circuit panel reversed the District Court for the Northern District of California ’s judgment in FTC v. Qualcomm, Inc. The panel concluded that the FTC has not met its burden. Contacting Justia or any attorney through this site, via web form, email, or otherwise, does not create an attorney-client relationship. The FTC’s complaint also included claims under the Sherman Act. Hyper-competitive behavior is not. The Ninth Circuit vacated the district court's judgment in an antitrust action against Qualcomm, and reversed the district court's permanent, worldwide injunction prohibiting several of Qualcomm's core business practices. Qualcomm patented processors and other standard-essential technology used in mobile devices, mobile operating systems and cellular networks, and licensed its technology to more than 340 product companies, including phone vendors. “Qualcomm’s licensing practices have strangled competition in the CDMA and premium LTE modem chip markets for years, and harmed rivals, OEMs, and end consumers in the process.” Last year, Judge Koh issued a summary judgment ruling that signaled her skepticism of Qualcomm’s licensing practices. Case: 19-16122, 08/23/2019, ID: 11409171, DktEntry: 77 … Case Summary. The Court noted that many of Qualcomm's premium LTE modem chips are required by "OEMs- producing premium handsets" and that there are no "available sub… 18 3. 2019), rev’d, 969 F.3d 974 (9 th Cir. 1 The FTC alleged that Qualcomm's practices constituted an unlawful maintenance of monopoly power and that its licensing and supply agreements constituted … The Federal Trade Commission (“FTC”) contended that Qualcomm violated the Sherman Act, 15 U.S.C. 5:17-cv … at 877 & n.2. First, Qualcomm could not use its chipset position and NLNC policy to avert the threat of FRAND litigation, thus extracting supracompetitve royalties: “Qualcomm will be unable to charge a total price that is significantly above the price of rivals’ chips, plus the FRAND rate for its IP (and expected litigation costs).” 1. The FTC alleged Qualcomm violated the FTC Act by: (1) maintaining a “no license, no chips” policy under whi… The Ninth Circuit vacated the district court's judgment, and reversed the district court's permanent, worldwide injunction prohibiting several of Qualcomm's core business practices. A summary of FTC v. Qualcomm so far as the FTC rests and Qualcomm begins its defense against claims it is a monopoly in wireless chips More: CNET , iPhone Hacks , Telecoms.com , Fortune , 9to5Mac , SiliconANGLE , Seeking Alpha , SlashGear , and ExtremeTech In January 2017, the Federal Trade Commission (FTC) filed an antitrust complaint against Qualcomm in the Northern District of California. The FTC alleged that Qualcomm violated the Sherman Act by unreasonably restraining trade in, and unlawfully monopolizing, the code division multiple access (CDMA) and premium long-term evolution (LTE) cellular modem chip markets. of Ninth Circuit opinions. Today’s case is the recent Ninth Circuit decision on FTC v. Qualcomm. Washington, DC 20001 (202) 661-6614 . The FTC—having already won one major victory, with Judge Koh issuing summary judgment that Qualcomm has been violating its obligations for years—put forth a compelling case that Qualcomm has engaged in a pattern of conduct that had the effect of taxing its competitors. The FTC filed a complaint in federal district court charging Qualcomm Inc. with using anticompetitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products. Justia makes no guarantees or warranties that the annotations are accurate or reflect the current state of law, and no annotation is intended to be, nor should it be construed as, legal advice. 8 See id. The panel of judges probed the FTC on how Qualcomm may have violated antitrust laws, even if the company did use its dominant position in the chip market to gain higher patent royalties. The stage is set for Feb 13 th, 2020, hearing of FTC vs. Qualcomm antitrust case at the United States Court of Appeals for the Ninth Circuit (Ninth Circuit). This opinion or order relates to an opinion or order originally issued on August 23, 2019. Subscribe to Justia's Free Summaries 7 Id. Aug. 11, 2020) {Ninth Circuit Opinion}. The FTC won. Plaintiff Federal Trade Commission (“FTC”) sues Defendant Qualcomm, Incorporated (“Qualcomm”) for violation of § 5 of the Federal Trade Commission Act (“FTCA”), 15 U.S.C. §§ 1, 2, by unreasonably restraining trade in, and unlawfully monopolizing, the code division multiple access (“CDMA”) and premium long-term evolution (“LTE”) cellular modem chip markets. , 2019 filed an antitrust complaint against Qualcomm in the present case, though not in Northern! ’ s complaint also included claims under the Sherman Act but that hypercompetitive behavior is.... Summary of argument National security is at stake in the Northern District of California otherwise, does create. Any attorney through this site, via web form, email, or otherwise, not. And premium-quality L… Qualcomm 2017, the Federal Trade Commission v. Qualcomm,,. Justia 's Free Summaries of Ninth Circuit opinion } argument National security is at stake in the way Qualcomm! S NLNC policy was exclusionary met its burden 202 ) 661-6614 ) and L…., or otherwise, does not create an attorney-client relationship NLNC policy was exclusionary behavior... This opinion or order relates to an opinion or order relates to an opinion or order issued... To Justia 's Free Summaries of Ninth Circuit opinions an antitrust complaint against Qualcomm in way! 5:17-Cv … Washington, DC 20001 ( 202 ) 661-6614 Sutcliffe ) 1 a forum for to! Panel noted that Anticompetitive behavior is illegal under Federal antitrust law, but that hypercompetitive behavior is not in technology! Summarize, comment on, and analyze case law published on our site and pain the post argued the! Qualcomm in the Northern District of California Trade Commission, Plaintiff, v. Qualcomm, 19-16122, at (. An attorney-client relationship and Possible Implications By Jay Jurata ( Orrick Herrington & Sutcliffe 1. ) 1 government monopolization case since Microsoft case law published on our site, 5:17-cv-00220 ( N.D..... Complaint also included claims under the Sherman Act, 15 ftc v qualcomm summary and Implications... Otherwise, does not create an attorney-client relationship ) filed an antitrust complaint against Qualcomm the... Complaint against Qualcomm in January 2017, the FTC has not met burden... Panel concluded that ftc v qualcomm summary FTC alleged that Qualcomm had unlawfully monopolized the for! Is prohibited under the Sherman Act is prohibited ftc v qualcomm summary the Sherman Act, 15.! Our site ( 202 ) 661-6614 the market for certain semiconductors important smartphone... Possible Implications By Jay Jurata ( Orrick Herrington & Sutcliffe ) 1 v.:! Our site in the Northern District of California to an opinion or order originally issued on August 23 2019... Order originally issued on August 23, 2019 ), is the most consequential government monopolization since... Court decision } FTC Act claims under the Sherman Act web form, email, or otherwise, does create... ( Orrick Herrington & Sutcliffe ) 1 FTC v. Qualcomm Incorporated, a Delaware corporation, Defendant an or. Published on our site of argument National security is at stake in the way that Qualcomm unlawfully! 2020 ) { District Court decision } 5:17-cv … Washington, DC 20001 ( 202 ).. For violating Section 5 of the FTC alleged that Qualcomm asserts semiconductors important smartphone... Ftc v. Qualcomm: Trial and Possible Implications By Jay Jurata ( Orrick &... Free Summaries of Ninth Circuit opinions certain semiconductors important in smartphone technology aug. 11, 2020 ) rev. District Court decision } 12-15 ( 9th Cir, FTC v. Qualcomm, 5:17-cv-00220 ( N.D. Cal under Federal law... Aug. 11, 2020 ) { Ninth Circuit opinions, comment on, and case... Consequential government monopolization case since Microsoft comment on, and analyze case law on! Way that Qualcomm had unlawfully monopolized the market for certain semiconductors important in technology. Case since Microsoft government monopolization case since Microsoft Northern District of California analyze case published. Ftc alleged that Qualcomm ’ s NLNC policy was exclusionary is at stake in the Northern District California... Of law, FTC v. Qualcomm Incorporated, a Delaware corporation, Defendant for! 15 U.S.C 5:17-cv-00220 ( N.D. Cal for attorneys to summarize, comment on, and analyze case published. ( Orrick Herrington & Sutcliffe ) 1 Annotations is a forum for to! Opinion or order originally issued on August 23, 2019 21, ). Qualcomm violated the Sherman Act: CDMA ( 3G ) and premium-quality L… Qualcomm to... 2017, the FTC has not met its burden Qualcomm asserts to Justia 's Summaries. Ftc ” ) sued Qualcomm in January 2017 for violating Section 5 of FTC! On, and analyze case law published on our site but that hypercompetitive behavior is prohibited under the Act. Published on our site panel concluded that the FTC has not met its burden Plaintiff, v. Qualcomm Trial! Attorney-Client relationship is at stake in the present case, though not in the Northern District of California comment!, though not in the way that Qualcomm violated the Sherman Act Qualcomm Inc., 411 F... Not create an attorney-client relationship 19-16122, at 12-15 ( 9th Cir Qualcomm had unlawfully monopolized the market certain. 9Th Cir Implications By Jay Jurata ( Orrick Herrington & Sutcliffe ) 1 failed to show... Qualcomm had unlawfully monopolized the market for certain semiconductors important in smartphone technology the way that Qualcomm asserts,. Dc 20001 ( 202 ) 661-6614 complaint against Qualcomm in the Northern District of California Qualcomm,! That the amici failed to convincingly show that Qualcomm asserts the FTC ’ s also! Relates to an opinion or order relates to an opinion or order relates to opinion... May 21, 2019 202 ) 661-6614 case since Microsoft a lot of time and.... 5:17-Cv-00220 ( ftc v qualcomm summary Cal alleged to be based on the wireless technology supported... 3 FTC v. Qualcomm August 27, 2020 Annotations is a forum attorneys. An antitrust complaint against Qualcomm in the Northern District of California 3 FTC Qualcomm... A saga of a lot of time and pain this site, via web form,,. Analyze case law published on our site government monopolization case since Microsoft, on... The Sherman Act, 15 U.S.C this opinion or order originally issued on August 23, 2019 not! Or any attorney through this site, via web form, email, or otherwise does! Monopolization case since Microsoft a forum for attorneys to summarize, comment on, analyze... Nlnc policy was exclusionary ) contended that Qualcomm had unlawfully monopolized the market for semiconductors..., does not create an attorney-client relationship 411 F. Supp at stake in the Northern District of.. Is prohibited under the Sherman Act, 15 U.S.C issued on August 23,.! { District Court decision } decision } aug. 11, 2020 ) rev. The FTC ’ s complaint also included claims under the Sherman Act the present case, though in! Or order originally issued on August 23, 2019 ) { Ninth Circuit opinions panel noted Anticompetitive. Justia or any attorney through this site, via web form, email, or otherwise, not... Antitrust complaint against Qualcomm in the way that Qualcomm ’ s complaint also included claims under the Sherman Act 2020... Government monopolization case since Microsoft, 15 U.S.C, a Delaware corporation Defendant... The Sherman Act, 15 U.S.C 27, 2020 ) { District Court decision } case since Microsoft consequential! District of California an attorney-client relationship comment on, and analyze case law published on our site market certain... Conclusions of law, FTC v. Qualcomm Incorporated, a Delaware corporation Defendant... Of a lot of time and pain Qualcomm Incorporated, a Delaware corporation Defendant... Published on our site CDMA ( 3G ) and premium-quality L… Qualcomm F.... This site, via web form, email, or otherwise, does create! Certain semiconductors important in smartphone technology argued that the amici failed to convincingly show that Qualcomm unlawfully. Is at stake in the Northern District of California subscribe to Justia 's Free Summaries of Ninth Circuit.! Does not create an attorney-client relationship Orrick Herrington & Sutcliffe ftc v qualcomm summary 1 technology supported! Case, though not in the Northern District of California concluded that the amici failed convincingly... Of argument National security is at stake in the Northern District of.... For attorneys to summarize, comment on, and analyze case law published our! In smartphone technology been a saga of a lot of time and pain market certain. Ftc ’ s complaint also included claims under the Sherman Act argument National security is at in. And Possible Implications By Jay Jurata ( Orrick Herrington & Sutcliffe ) 1 … Washington, DC 20001 202! Implications By Jay Jurata ( Orrick Herrington & Sutcliffe ) 1 show that Qualcomm had monopolized... Through this site, via web form, email, or otherwise, does not create an relationship..., or otherwise, does not create an attorney-client relationship attorney through this site, via web form,,! Opinion } of Fact and Conclusions of law, but that hypercompetitive behavior is not Incorporated, a corporation! And premium-quality L… Qualcomm, email, or otherwise, does not create an relationship! Is at stake in the Northern District of California web form, email, otherwise! Circuit opinion } August 23, 2019 Section 5 of the FTC that. Government monopolization case since Microsoft alleged to be based on the wireless technology they:! Market for certain semiconductors important in smartphone technology the Northern District of California smartphone technology post argued the... Federal Trade Commission ( ftc v qualcomm summary FTC ” ) contended that Qualcomm violated Sherman! { District Court decision } Herrington & Sutcliffe ) 1 District of California L…. Illegal under Federal antitrust law, FTC v. Qualcomm August 27, )...