Apple and Qualcomm may have dropped their worldwide lawsuit war against each other, but that wasn’t the only battle Qualcomm faced. The FTC also brought a case against Qualcomm, alleging antitrust abuses and illegal behavior. In a ruling May 21, US District Court Judge Lucy Koh found that Qualcomm had violated the Federal Trade Commission Act. Qualcomm has pledged to immediately appeal the ruling, which has significant implications for its business structure and earnings.
“We strongly disagree with the judge’s conclusions, her interpretation of the facts and her application of the law,” Don Rosenberg, executive vice president and general counsel of Qualcomm, said in a statement Wednesday.
Judge Koh largely sided with the FTC’s findings and arguments and has hit Qualcomm with multiple requirements. One of the major findings is that Qualcomm is not allowed to use its “no license, no chips” strategy that required customers to license Qualcomm patents in order to purchase its microprocessors. The company is also prohibited from striking exclusivity deals with companies like Apple, and from refusing to license its patents according to FRAND (Fair, Reasonable, and Non-Discriminatory) terms.
“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,” Koh writes.