U.S. Judge Rules Qualcomm Violated Antitrust Law, Shares Fall 13%

In 2017, the U.S. Federal Trade Commission (FTC) filed a lawsuit against Qualcomm, accusing the company of using “anticompetitive” tactics to maintain its monopoly in the market. Today, U.S. Judge Lucy Koh has issued a ruling in that case, saying that Qualcomm’s violation of the antitrust law harmed rivals, smartphone makers, and consumers (via CNBC).

“Qualcomm’s licensing practices have strangled competition,” Koh wrote in a 233-page decision, adding that the chip maker illegally suppressed competition in the market by threatening to cut off supplies and extracting excessive licensing fees.

The judge also ordered Qualcomm to renegotiate licensing agreements at reasonable prices, without threatening to cut off supplies. She also ordered the San Diego-based company be monitored for seven years to ensure its compliance:

“This evidence of Qualcomm’s intent confirms the court’s conclusion that Qualcomm’s practices cause anticompetitive harm because no monopolist monopolizes unconscious of what he is doing,” she wrote.

Koh also said testimony from some Qualcomm witnesses “lacked credibility,” faulting Chief Executive Steve Mollenkopf and others for giving “long, fast, and practiced narratives” and saying company emails and notes contradicted his testimony.

Meanwhile, Qualcomm has said it will immediately ask Koh to put her decision on hold.

“We strongly disagree with the judge’s conclusions, her interpretation of the facts and her application of the law,” general counsel Don Rosenberg said in a statement.

Although Qualcomm primarily makes cellphone processors and modem chips, it generates most of its profits by licensing its technology to mobile phone makers.