A federal court judge has twitched Qualcomm straight back into an ocean of insecurity. On Tuesday, Lucy Koh, U.S. District Court Judge, said the chip maker illicitly hurt rivals in the wireless chip market. As per the judgement, Qualcomm used its market power to push unessential licensing fees on phone makers like Apple. Besides, the world’s largest producer of smartphone chips and modems has behaved illegally for many years by charging excessive fees for using its license and technology. The Federal Trade Commission (FTC) filed an antitrust case against the chip maker two years ago, in 2017. Now the judge’s decision has sided the FTC.
Qualcomm is a tech company whose technology is present all-over the smartphone market. Now the chip maker intends to lead the latest 5G network technology. The company has previously obtained a license for its technology and makes most of the money from it. Its technology enables phones to connect to towers while making phone calls. Phone makers offer a cut of the total value of each phone they sell. Thus Qualcomm earns billions of dollars via licensing. Now Koh has instructed Qualcomm to negotiate all its settlements. The company cannot even sign private and exclusive supply deals with phone makers. To hold the company liable, the chip maker has to submit agreement and surveillance reports for the upcoming three years. Also, it must report to the US FTC every year during the period of time.
The ruling states Qualcomm’s licensing practices have restricted competition in the CDMA and premium LTE modem chip markets for many years. The move has also mistreated competitors, original equipment manufacturers, and end users. Don Rosenberg, executive vice president and general counsel of Qualcomm, said they strongly oppose the judge’s decision, her explanation of the facts and her usage of the law. The judgment could massively decrease the amount of money phone makers pay for their products to execute basic operations. After hearing, the chip makers stock resulted in a fall by more than 10% on Wednesday.