END OF THE LINE: FTC DROPS ITS ANTITRUST CASE VS. QUALCOMM

Trade Commission cites ‘headwinds’ in seeking Supreme Court review

The U.S. Federal Trade Commission has officially dropped its antimonopoly case against Qualcomm — ending a four-year legal fight between the regulator and the San Diego wireless technology giant.

The agency confirmed that it would not petition the U.S. Supreme Court to review an appeals court’s ruling in favor of Qualcomm. The deadline to seek a high court appeal expired Monday.

The FTC sued Qualcomm in January 2017, alleging that the chipmaker illegally leveraged its market dominance in certain cellular processors to force smartphone makers to pay skyhigh patent fees — a practice the agency dubbed “no license, no chips.”

The FTC won a sweeping antitrust judgment against the company in May 2019 from U.S. District Judge Lucy Koh. Qualcomm appealed, and last August a three-judge

panel of the U.S. Ninth Circuit Court reversed Koh’s ruling, throwing out the verdict.

The FTC asked the full cohort of nearly 30 active U.S. Ninth Circuit judges to reconsider. The request was denied. No judges supported rehearing the case.

Several factors could have contributed to the FTC decision not to seek Supreme Court review. But a key one was probably the ongoing transition to a new Biden administration, said David Reichenberg, an antitrust

attorney with Cozen O’Connor in New York.

The change in administrations likely made it difficult to get a consensus on whether devoting resources to fight this complex case was worth it.

“In my opinion, some of it is that the timing just didn’t work,” he said.

The Qualcomm-FTC dispute centered on the intersection where property rights of patent holders collide with antitrust laws to ensure robust competition.

“Given the significant headwinds facing the commission in this matter, the FTC will not petition the Supreme Court,” said Acting

FTC Chairwoman Rebecca Kelly Slaughter in a statement. “The FTC’s staff did an exceptional job presenting the case, and I continue to believe that the district court’s conclusion that Qualcomm violated the antitrust laws was entirely correct and that the court of appeals erred in concluding otherwise.”

Slaughter added that the FTC and others need to “boldly enforce” antitrust laws to guard against abusive tactics from dominant firms in technology markets that involve intellectual property.

In a statement, Qualcomm said it is pleased that

the Ninth Circuit’s decision exonerating the company stands. It characterized the ruling as encouraging innovation.

“Qualcomm got to where it is today by investing billions in research and development and inventing technologies used by billions of people around the world,” said Don Rosenberg, executive vice president and general counsel for Qualcomm. “Now more than ever we must preserve the fundamental incentives to innovate and compete.”