We review products independently, but we may earn affiliate commissions from buying links on this page. Terms of use. Qualcomm may have to overhaul its business after a US judge ruled that it has used its monopoly in the mobile chip market to extract excessive fees from smartphone makers. According to US District Judge Lucy Koh, Qualcomm has been abusing its patent trove and control over the modem chip market to force device makers to pay up or risk losing access to the company's technologies. These tactics have suppressed competition in the market, potentially forcing consumers to pay higher prices for products, the judge said. Tuesday's decision sides with a 2017 court case the Federal Trade Commission brought against Qualcomm, which accused the chipmaker of using the same anticompetitive tactics. Among the claims was that the company forced smartphone makers to pay a "tax" when using rivals' baseband processors. Judge Koh found that Qualcomm is still engaging in the anticompetitive conduct, and will continue to hold monopoly power over the market due to its lead in the 5G modem chip market. She ordered the company to renegotiate its patent licensing deals with customers so cut-off threats are eliminated. "It makes little sense for the court, having found that Qualcomm's patent licenses are the product of anticompetitive conduct, to leave those licenses in place," she said in the 233-page ruling. "To permit Qualcomm to continue to charge unreasonably high royalty rates would perpetuate its artificial surcharge on rivals' chips, which harms rivals, OEMs (original equipment manufacturers), and consumers." In addition, the ruling requires Qualcomm to makes its patent licensing available to rival modem chip suppliers on fair, non-discriminatory terms. The company is also barred from striking exclusive chip supplying deals that force out rival suppliers. To ensure compliance, Qualcomm must report to the FTC on an annual basis for the next seven years. Qualcomm will appeal the district court's ruling in the Ninth Circuit US Court of Appeals. "We strongly disagree with the judge's conclusions, her interpretation of the facts and her application of the law," Qualcomm general counsel Don Rosenberg said in a statement. However, there's a high likelihood that Judge Koh's ruling will stand, according to patent analyst Florian Mueller. "With such a rich and powerful body of evidence, it's going to be hard for Qualcomm to persuade the appeals court (the Ninth Circuit) that the facts are favorable to its defenses," he wrote in a blog post.
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We review products independently, but we may earn affiliate commissions from buying links on this page. Terms of use. Qualcomm may have to overhaul its business after a US judge ruled that it has used its monopoly in the mobile chip market to extract excessive fees from smartphone makers. According to US District Judge Lucy Koh, Qualcomm has been abusing its patent trove and control over the modem chip market to force device makers to pay up or risk losing access to the company's technologies. These tactics have suppressed competition in the market, potentially forcing consumers to pay higher prices for products, the judge said. Tuesday's decision sides with a 2017 court case the Federal Trade Commission brought against Qualcomm, which accused the chipmaker of using the same anticompetitive tactics. Among the claims was that the company forced smartphone makers to pay a "tax" when using rivals' baseband processors. Judge Koh found that Qualcomm is still engaging in the anticompetitive conduct, and will continue to hold monopoly power over the market due to its lead in the 5G modem chip market. She ordered the company to renegotiate its patent licensing deals with customers so cut-off threats are eliminated. "It makes little sense for the court, having found that Qualcomm's patent licenses are the product of anticompetitive conduct, to leave those licenses in place," she said in the 233-page ruling. "To permit Qualcomm to continue to charge unreasonably high royalty rates would perpetuate its artificial surcharge on rivals' chips, which harms rivals, OEMs (original equipment manufacturers), and consumers." In addition, the ruling requires Qualcomm to makes its patent licensing available to rival modem chip suppliers on fair, non-discriminatory terms. The company is also barred from striking exclusive chip supplying deals that force out rival suppliers. To ensure compliance, Qualcomm must report to the FTC on an annual basis for the next seven years. Qualcomm will appeal the district court's ruling in the Ninth Circuit US Court of Appeals. "We strongly disagree with the judge's conclusions, her interpretation of the facts and her application of the law," Qualcomm general counsel Don Rosenberg said in a statement. However, there's a high likelihood that Judge Koh's ruling will stand, according to patent analyst Florian Mueller. "With such a rich and powerful body of evidence, it's going to be hard for Qualcomm to persuade the appeals court (the Ninth Circuit) that the facts are favorable to its defenses," he wrote in a blog post.