Judge Rules Qualcomm's Practices Violate Antitrust Law

By WSJ City 

Qualcomm unlawfully suppressed competition in the market for cellphone chips and used its dominant position to exact excessive licensing fees, a federal judge ruled in a decision that could challenge the company's business model and shake up the smartphone industry.

KEY FACTS:

   -- Qualcomm collected billions of dollars by charging royalties on a 
      percentage of a smartphone's price. 
 
   -- This was challenged by US District Judge Lucy Koh. 
 
   -- The judge ordered that Qualcomm negotiate licensing agreements with 
      customers free of unfair tactics... 
 
   -- Such as threatening to cut off access to its chips. Qualcomm must also 
      license its patents to rival chip makers at fair and reasonable prices. 
 
   -- It can't sign exclusive supply agreements with smartphone makers that 
      block rivals. 
 
   -- Qualcomm didn't immediately respond to a request for comment late 
      Tuesday. 

Why This Matters

The decision sided with the FTC, which brought an antitrust lawsuit against Qualcomm in January 2017. The ruling clouds the outlook for Qualcomm, which long has generated more profit from patent licensing than the sale of its chips. But it could lower costs for Apple and other smartphone makers that have complained Qualcomm's pricing tactics allowed it to profit off innovations unrelated to its patents such as new displays or cameras.

A fuller story is available on WSJ.com

WSJ City: The news, the key facts and why it matters. Be deeply informed in less than five minutes. You can find more concise stories like this on the WSJ City app. Download now from the App Store or Google Play, or sign up to newsletters here http://www.wsj.com/newsletters?sub=356&mod=djemwsjcity

(END) Dow Jones Newswires

May 22, 2019 06:56 ET (10:56 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.