The iPhone chip supplier Qualcomm, must now wage a fight with U.S. regulators even as it contests a separate $1 billion lawsuit filed by Apple Inc which became clear after the ruling of a federal judge ruled late on Monday where the Federal Trade Commission’s antitrust lawsuit against Qualcomm Inc was allowed to be proceeded.
By saying the agency’s allegations would amount to anticompetitive behavior on Qualcomm’s part if proved true, Qualcomm’s motion to dismiss the FTC’s lawsuit was denied by U.S. District Judge Lucy Koh of the Northern District of California in San Jose.
The case is still in its early stages, Qualcomm said in response. “FTC will have the burden to prove its claims, which we continue to believe are without merit,” Don Rosenberg, executive vice president and general counsel of Qualcomm, said in a statement after the verdict.
In order to maintain a monopoly on the chips that let cell phones connect to mobile data networks, the company engaged in anticompetitive tactics, is the allegation that was been levelled against it by the FTC in January while filing the suit.
Unless customers also sign a patent license agreement and pay Qualcomm fees, the San Diego company refuses to sell chips under its “no license, no chips” policy and it was this policy or business strategy that was highlighted by the FTC. The U.S. antitrust agency alleged that in order to keep a monopoly, Qualcomm refused to grant licenses to its rivals.
Arguing that even if all the FTC’s allegations were true, they would not amount to wrongdoing, Qualcomm asked Koh to throw out the case.
Qualcomm is a major supplier to Apple and Samsung Electronics Co Ltd for modem chips that connect phones to wireless networks and it is also the largest independent maker of chips used in smartphones.
Briefs opposing Qualcomm’s attempt to the have the case dismissed were submitted to the court by Intel Corp and Samsung Electronics Co Ltd which are not parties to the case but are rivals.
By ruling that the FTC had “adequately alleged” anticompetitive behavior, Koh rejected Qualcomm’s arguments.
“We look forward to further proceedings in which we will be able to develop a more accurate factual record,” Qualcomm’s Rosenberg said in the statement.
Separately in January, Apple sued Qualcomm for $1 billion. Under a ruling last month from the U.S. Supreme Court, Qualcomm’s chip licenses are invalid, Apple argued last week. Qualcomm was prompted to sue the contract manufacturers after Apple’s contract manufacturers such as Foxconn stopped paying Qualcomm as that case proceeds.
From regulators across the globe, including China and South Korea, Qualcomm has faced a series of antitrust rulings and investigations from regulators across the globe, in addition to the complaint from the FTC.
(Adapted from Reuters)