San Diego-Based Qualcomm Violated Antitrust Laws, Judge Rules

SAN DIEGO -- Telecommunications equipment company Qualcomm violated antitrust laws by charging excessive licensing fees to cellphone makers, a federal judge has ruled.

In a ruling issued late Tuesday, U.S. District Court Judge Lucy Koh found that Qualcomm forced cellphone companies to accept excessive fees for the ability to use Qualcomm patents, and would threaten to withhold access to its chips if companies did not agree to its terms.

The ruling stems from a case brought by the U.S. Federal Trade Commission in 2017, when the commission accused Qualcomm of operating as a monopoly that ``engaged in exclusionary conduct that taxes its competitors' baseband processor sales, reduces competitors' ability and incentive to innovate, and raises prices paid by consumers for cell phones and tablets.''

Closing arguments in the trial were delivered around five months ago in a San Jose courtroom.

On Tuesday, Koh ordered Qualcomm to renegotiate license terms with its customers and refrain from any threats to withhold chips from future agreements.

Qualcomm indicated that it would seek a stay and appeal of Koh's ruling.

In a statement issued Wednesday morning, as its stock price plummeted as a result of the ruling, Qualcomm said it would ``immediately seek a stay of the district court's judgment and an expedited appeal to the U.S. Court of Appeals for the 9th Circuit.''

"We strongly disagree with the judge's conclusions, her interpretation of the facts and her application of the law,'' Qualcomm Executive Vice President and General Counsel Don Rosenberg said.

City News Service contributed to this report.