FTC: Qualcomm Chip Monopoly Uses License Refusal; Oral Argument Is Feb. 13

Qualcomm has monopoly power in two key chip markets, maintained by refusing licenses to rival chipmakers, the FTC argued to the 9th U.S. Circuit Court of Appeals (see 1910100017). Oral argument is set for 9:30 a.m. Feb. 13 in San Francisco. Qualcomm and DOJ said previously that the lawsuit and lower court’s injunction threaten national security, given Qualcomm’s role in leading 5G advancement against Chinese rivals. The FTC called those claims “purely speculative.” Intel supported the commission in the case, also announcing it agrees with the district court’s finding “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.” Intel claims it “suffered the brunt of Qualcomm’s anticompetitive behavior, was denied opportunities in the modem market, was prevented from making sales to customers and was forced to sell at prices artificially skewed by Qualcomm.” Ericsson and Samsung previously argued in favor of Qualcomm, with Samsung saying contract and patent law are “better suited” for settling disputes about fair, reasonable and nondiscriminatory (FRAND) terms. American, Japanese and German automaker groups said prices of cars with 5G will likely increase if Qualcomm wins. The Alliance of Automobile Manufacturers and Denso with Continental Automotive Systems filed briefs. “Automakers have been forced into unnecessary and inefficient [standard-essential patent] licensing negotiations ... even though chip sales that exhaust patent rights ... would negate the need for such negotiations while allowing the patentee to be compensated for its inventions based on the price charged for a chip,” the alliance argued. That will worsen if Qualcomm practices are ratified, it said. The Computer & Communications Industry Association supports the agency, saying Qualcomm has an “antitrust duty” to license competing chip manufacturers on FRAND terms. Open Markets also supported the FTC, saying in a release that Qualcomm practices compel “smartphone and tablet producers to pay exorbitantly high amounts for their chips.” The company didn’t comment Monday. The 9th U.S. Circuit Court of Appeals scheduled Feb. 10 oral argument on challenges of FCC wireless infrastructure orders (see 1912020018).