FTC Wins Antitrust Lawsuit Against Qualcomm [Updated]

Discussion in 'MacRumors.com News Discussion' started by MacRumors, May 22, 2019.

  1. MacRumors macrumors bot

    MacRumors

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    The FTC today won its antitrust lawsuit against Qualcomm over the chipmaker's anticompetitive business practices.

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    As first reported by legal expert Florian Mueller on his blog FOSS Patents, U.S. District Judge Lucy Koh has ruled that Qualcomm's so-called "no license, no chips" model, under which the chipmaker has refused to provide chips to companies without a patent license, violates federal antitrust laws.

    The ruling has significant implications for Apple, as Koh ordered that Qualcomm must negotiate or renegotiate license terms with its customers in good faith without threatening to cut off access to its cellular modem chips or related software and technical support, according to Mueller.

    Qualcomm also must make patent licenses available to rival cellular modem suppliers on fair, reasonable, and non-discriminatory or "FRAND" terms, and may not enter exclusive agreements for the supply of modem chips.

    Apple sued Qualcomm in early 2017 over these anticompetitive business practices, and unpaid royalty rebates, but the two companies announced an agreement to end all ongoing litigation worldwide last month. The settlement includes a six-year licensing agreement and a multiyear chipset supply agreement.

    It's unclear if Apple had any hint that the FTC was likely to win its antitrust case and if that had any implications on its settlement with Qualcomm.

    While it appears that Intel will remain the sole supplier of LTE modems in 2019 iPhones, Qualcomm is expected to supply Apple with its industry-leading 5G modems for 2020 iPhones now that the companies have settled, so Koh's ruling could lead to a fairer agreement between Apple and Qualcomm moving forward.

    Farther down the road, multiple reports have indicated that Apple is designing its own cellular modems that would allow it to drop Qualcomm for good, although they might not appear in iPhones until as late as 2025.

    Qualcomm will likely appeal the ruling, but Mueller believes the chipmaker faces an uphill battle given "such a rich and powerful body of evidence" regarding its anticompetitive business practices. Mueller has excellent, in-depth coverage of Koh's ruling on his blog FOSS Patents that is well worth a read.


    Update: Qualcomm has announced that it will immediately seek a stay of the ruling and an expedited appeal to the U.S. Court of Appeals for the 9th Circuit.

    "We strongly disagree with the judge's conclusions, her interpretation of the facts and her application of the law," said Don Rosenberg, general counsel of Qualcomm, in a statement shared by the Washington Post's Hamza Shaban.

    Update 2: The ruling will not affect last month's settlement between Apple and Qualcomm, according to Bloomberg. "There are no provisions in the deal between Apple and Qualcomm that allowed for a reversal or change in the event the FTC won its case against the chipmaker," the report claims, citing a source.

    Koh's complete ruling is embedded ahead.

    Click here to read rest of article...

    Article Link: FTC Wins Antitrust Lawsuit Against Qualcomm [Updated]
     
  2. Abazigal macrumors G4

    Abazigal

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  3. cmaier macrumors G5

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    How many times have I explained on here that this was the correct result under the law? And how many times was I called an apple fanboy by armchair lawyers merely for pointing out the Supreme Court precedent that required this result?
     
  4. Hazmat401 macrumors member

    Hazmat401

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    #4
    Looks like Apple had the inside scoop on how the FTC was going to rule

    Apple wanting the best components for the 2020 iPhone didn’t want to sue Qualcomm into oblivion without having a viable alternative to 5G chips

    This was a smart chess move
     
  5. WiiDSmoker macrumors 65816

    WiiDSmoker

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    #5
    My takeaway from this article is that Apple is only using intel for 2019 iPhone models which means I’m not buying a 2019 iPhone.
     
  6. Plutonius macrumors 604

    Plutonius

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    #6
    Too late for Intel to get back into 5G.

    In any case, I expect Qualcomm to appeal the decision.
     
  7. wigby macrumors 68000

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    How was it a smart move? Wouldn't the terms that Apple and Qualcomm settled with disqualify any renegotiating of licensing or royalties for the next 6 years?
     
  8. Andres Cantu macrumors 68030

    Andres Cantu

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    Wake me up when the appeal to the appeal to the appeal fails.
     
  9. macduke macrumors G4

    macduke

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    I’ve been arguing the FRAND angle for some time. When your patents are necessary for standards, you have to follow FRAND guidelines.

    The license angle was murkier, but always seemed unreasonable to not only sell your product to a user, but to also charge them again just to use it.

    So they could get a good deal, and then Qualcomm would be forced to give them an even better deal? Apple is pretty good at stuff like this so I wouldn’t put it past them.
    --- Post Merged, May 22, 2019 ---
    I think you completely missed this part of the article:

     
  10. blcamp macrumors regular

    blcamp

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    #10
    Because Intel bailed. Apple still needs modem chips, and isn’t yet ready with it’s own.
     
  11. redneckitengineer macrumors 6502

    redneckitengineer

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    I love Qualcomm's response. Has anyone in these litigation's actually every responded, ok we'll pay. We should just always assume that the losing party is going to fight it. I've never heard of anyone agreeing to be the loser.
     
  12. djphat2000 macrumors regular

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    It states they have to renegotiate.
     
  13. Scottsoapbox macrumors 6502a

    Scottsoapbox

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    Three times.
     
  14. djphat2000 macrumors regular

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    I wouldn't necessarily go with that notion. It may very well be the case that Apple has dual models to work with. An intel chipset and a Qualcomm one at every stage of development. Just in case they need to make immediate changes or to have multiple suppliers work for the same iPhone. Even more so for different regions. Never know when a BAN on something will pop up and you have to be able to supply a different component quickly.
     
  15. 69Mustang macrumors 604

    69Mustang

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    For this to be relevant, the deal between Apple and Qualcomm would have had to have been negotiated in bad faith with the threat of cutting off access to cellular modem chips or related software and technical support. Where has it been noted that their current agreement was negotiated in that manner? We can't make assumptions this ruling will affect the Apple/QC agreement either positively, negatively, or even at all.
     
  16. cmaier macrumors G5

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    A court order to renegotiate trumps any agreement not to.
     
  17. ksec, May 22, 2019
    Last edited: May 22, 2019

    ksec macrumors 6502a

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    I understand your point. But it wasn't *correct* per se until it is tested under the law, since it's common wireless industry practice embraced by wireless participants for decades now, and literally predate many things.

    But I am glad we got this results, we don't need all these mess any more. Just give me a bloody iPhone with Qualcomm Modem!

    Note: The blog post is an interesting read for anyone who would like more details.
     
  18. cmaier macrumors G5

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    In my mind it is reversed. The license angle has previously been resolved my multiple Supreme Court cases. FRAND is always case by case - given the facts of the situation, is it fair and reasonable? But the license angle is pretty clear given the law.
     
  19. Heineken macrumors 6502a

    Heineken

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  20. Baymowe335, May 22, 2019
    Last edited: May 22, 2019

    Baymowe335 macrumors 601

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    Because Apple got terms they liked. Likely far better than people here speculated they got when so many claimed Apple “lost.”
     
  21. cmaier macrumors G5

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    “Correct” means that it was the only possible result of applying the facts to the law. The law is pretty clear now. The fact that something has been going on a long time doesn’t inoculate it from Supreme Court decisions. Each time the Supreme Court reiterated that patent exhaustion is a serious thing and gave it more teeth, this result became more and more inevitable.
     
  22. Sasparilla macrumors 65816

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    Nice to see. Well, assuming the finding is upheld, it'll mean lower prices for smartphone vendors (not just Apple) going forward and lower profits for Qcom.

    One always wonders at what point will vendors like Samsung (that make their own CPU's) would start selling Galaxy S models in the U.S. with their own CPU's (like much of the rest of the world) instead of Qcom's CPU's - that would be a big hit for Qcom. Huawei has that capability as well but puts in Qcom CPU's for alot of markets.
     
  23. realtuner macrumors 6502a

    realtuner

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    If I had a nickel....

    Of course this was the correct result. I don’t know how people could support Qualcomms position in this. They literally lost every single antitrust case brought against them (5 before the FTC case) regarding their modem licensing practices. And people thought maybe they’d finally win one?
     
  24. az431 macrumors 65816

    az431

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    #24
    Because it owed Qualcomm billions in unpaid licensing fees, and was highly unlikely to prevail.
    --- Post Merged, May 22, 2019 ---
    You've never heard of it, but the losing party almost never appeals because appeals are discretionary, are unlikely to result in a reversal, require posting a bond for the entire damages that were awarded, and require payment of costs and attorney fees if it is not reversed.

    When your source for news is MR you're unlikely to learn much of anything about how the legal system actually works.
     
  25. macfacts macrumors 68040

    macfacts

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    #25
    FRAND, meaning apple should be paying more. Non discriminary means all should be paying same, not cheaper because of exclusive deals.
     

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