Qualcomm loses FTC antitrust case, ordered to renegotiate patent licenses

The Federal Trade Commission has prevailed in its antitrust case against Qualcomm, with the verdict impacting how Qualcomm negotiates patent licenses from phone manufacturers going forward. The FTC filed the lawsuit back in 2017, alleging that Qualcomm resorted to anti-competitive tactics to maintain its dominant position in the cellular modem space.

Qualcomm has an effective monopoly when it comes to baseband modems, with the company licensing its tech to everyone from Apple, Samsung, Huawei, LG, Sony, Lenovo, and others. Basically, if you’re using a phone that connects to a 4G network, chances are it’s using a Qualcomm modem. Qualcomm also has a trove of networking patents around 2G, 3G, and 4G, and software features including Wi-Fi power management and airplane mode. To use any of these features, phone makers had to shell out a license fee.

The FTC took issue with the way Qualcomm licensed its technology — the chip vendor charged a license fee as a percentage of the overall cost of the handset. As such, Apple and Samsung had to shell out more to use the same modem versus Motorola or other budget players.

Saying that Qualcomm’s royalty rates are “unreasonably high,” Judge Lucy H. Koh of the United States District Court for the Northern District of California has found the chip vendor guilty of violating the FTC’s antitrust laws. From FOSS Patents:

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