The Federal Trade Commission announced Monday it will not petition for a review of a court ruling that reversed a federal judge’s finding that San Diego tech giant Qualcomm violated U.S. antitrust law.
The FTC’s lawsuit challenging Qualcomm for allegedly monopolistic business practices was initially decided in the agency’s favor, with U.S. District Judge Lucy Koh ruling in 2019 that the company harmed competition.
The FTC argued Qualcomm illegally leveraged its position in the mobile chip market to strong-arm companies into paying for access to its chips.
Koh ordered Qualcomm to renegotiate its patent license agreements with cellphone makers, many of which the judge wrote were “long-term or perpetual in duration” while being “negotiated under the threat of lack of access to chip supply, technical support, or software.”
Qualcomm appealed Koh’s ruling and a three-justice panel of the 9th Circuit Court of Appeals reversed her decision last year.
In its 56-page opinion, the panel wrote, “Anticompetitive behavior is illegal under federal antitrust law. Hypercompetitive behavior is not. Our job is not to condone or punish Qualcomm for its success, but rather to assess whether the FTC has met its burden under the rule of reason to show that Qualcomm’s practices have crossed the line to ‘conduct which unfairly tends to destroy competition itself.’ We conclude the FTC has not met its burden.”
The FTC’s request for a review of that decision was later denied.
In a statement, Acting Chairwoman Rebecca Kelly Slaughter said the FTC will not petition for a Supreme Court review of the appellate court’s decision “given the significant headwinds facing the commission in this matter.”
Slaughter said, “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. Now more than ever, the FTC and other law enforcement agencies need to boldly enforce the antitrust laws to guard against abusive behavior by dominant firms, including in high-technology markets and those that involve intellectual property. I am particularly concerned about the potential for anticompetitive or unfair behavior in the context of standard setting and the FTC will closely monitor conduct in this arena.”