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Qualcomm abused its monopoly on critical chip patents for decades, a US federal judge in California said on Wednesday in a decision with radical implications for the cellphone market.
In a 233-page opinion [PDF] Judge Lucy Koh came down heavily on the chip designer, saying it had violated antitrust laws and "strangled competition" by insisting that companies license its patents at unreasonable prices before being allowed to purchase its chips. Qualcomm chips are an essential component in modern mobile phones.
Koh - Injunction - Orders - Qualcomm - Chips
Koh also issued a permanent injunction that orders Qualcomm to sell its chips to companies without requiring them to license its patents. She also ordered that the company be monitored by federal regulators for seven years.
The judgment is a huge win for America's Federal Trade Commission (FTC) which brought the case but faced considerable criticism for what some say was an unwarranted intervention in the market.
Qualcomm - Decision - Stay - Injunction - Judge
Qualcomm has said it will appeal the decision and seek an immediate stay on the injunction. "We strongly disagree with the judge's conclusions, her interpretation of the facts and her application of the law," the company said in a statement. The impact of the decision on Qualcomm's bottom line was reflected in an instant 12 per cent drop in its share price.
Interestingly, Apple's stock also dropped two per cent on the news: an indication that the market feels Apple may have overpaid in a $4.5bn deal it struck with Qualcomm last month to settle a global legal battle between the two companies.
Ca - Breathe
"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," Judge Koh wrote. "Qualcomm’s licensing practices are an unreasonable restraint of trade."
Decision - Injunction
Explaining her decision to grant a permanent injunction,...
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