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FTC v. Qualcomm ruling coincides with expert testimony

On May 21, 2019, US District Court Judge Lucy Koh agreed with the Federal Trade Commission (FTC) and ruled that Qualcomm violated antitrust laws. On behalf of the FTC, Bates White supported expert Carl Shapiro in the litigation against Qualcomm, which holds a portfolio of patents essential to cellular communication standards. The case concerns modem chips that transmit voice calls and data and are used in mobile phones and other handheld devices. Qualcomm is the leading manufacturer of several types of modem chips and also has a large number of patents necessary for implementing wireless communication standards. The FTC sued Qualcomm in 2017, accusing the chip maker of charging “onerous” fees in licensing its patents and alleging that Qualcomm used its dominant position as a supplier of modem chips to charge supra-FRAND royalties, impose anticompetitive supply and licensing terms on cell phone manufacturers, and weaken competitors. 

In her ruling, the judge found that Qualcomm suppressed competition in the smartphone chip market and charged excessive licensing fees. She ordered Qualcomm to strike new licensing agreements. This decision parallels Dr. Shapiro’s testimony on market definition, market power, and the anticompetitive effects of Qualcomm’s conduct. Dr. Shapiro was the FTC’s sole economic expert in the case; thus, his testimony covered all liability issues. Judge Koh’s decision is available here.

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